Articles Tagged with Board of Directors

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Paris, France, December 10, 2013. LeWeb Day 1. Image by Dan Taylor/Heisenberg Media

Ride sharing behemoth Uber is keeping plenty of lawyers busy. The latest lawsuit concerns control over its board of directors and whether its founder and former CEO, Travis Kalanick, hid critical, damaging facts when he asked the board to allow three more members who he could name. This lawsuit comes after Kalanick resigned as CEO of the company in June after tales of company misbehavior and sexual harassment emerged but as he left as CEO he returned as a board member.

Earlier this month Benchmark Capital Partners, one of Uber’s first investors, sued Kalanick to try to prevent his return as CEO, reports the Los Angeles Times. The lawsuit was filed in Delaware Chancery Court and claims Kalanick breached his fiduciary duty and contractual obligations and engaged in fraudulent concealment by stacking the company’s board with allies to insulate him from possible repercussions of his actions and enable him to return as CEO. Uber and Kalanick are both named but damages are only sought from Kalanick.

photo - pick the right boardIf you’ve chosen a corporation as the structure for your business you need to have a board of directors. If chosen well these people can be a huge asset to your company and help your business become more successful. Choosing the wrong people can be a big setback, sucking time, energy and resources away from managing a business and towards a malfunctioning board.

A board of directors is elected by stockholders and it oversees the corporation’s management. Daily functioning of the business should be left to executive officers recruited and retained by the board. Major decisions affecting a business should be decided at the board level.

If you have a new business you need to find directors. If you have an existing company after a board member leaves you may need to find a replacement. In either case, here are some things to think about.

  • Find someone you trust. A board member will be privy to the company’s innermost secrets. A board member who uses his or her position for personal gain, perhaps by starting a competing company or working for one, would be a huge problem. Though this could be grounds for legal action against this individual, the threat of a lawsuit might not necessarily prevent the person from trying to cash in on his or her access to the company.
  • Those to avoid: VentureBeat lists The Do-Nothing, The White Flag (avoids confrontation), The Cabalist (his or her personal agenda is foremost), The Meddler (focuses too much on details) and The Pontificator (just wants to hear himself talk).
  • Are there too many board members? Do meetings get bogged down because too many people are involved? Is it difficult to reach a decision because of so many opinions? A larger board will also probably be less engaged with the business.
  • What skillsets you should be looking for in board members depends on the maturity of the business. Individuals whose skills are especially helpful for a startup may not be so helpful with a mature, established business. Board members should also have a mix of skills that complement each other and members of management.
  • A board member should be a good fit with the culture of the business. Is the culture dominated by those with strong opinions or run by consensus?
  • How much compensation should a board member receive? If you want skilled, experienced people their time is very valuable. It will take a commitment by a board member to become engaged, do the homework necessary to make informed decisions and attend and participate in board meetings.

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