So, given the recent OpenAI shinanigans, I thought it might be a good opportunity to pass on some knowledge. You need to have a plan for managing your board of directors.
I believe that my board should absolutely be able to fire my ass if I go batshit insane and start collecting my urine in jars and making antisemitic comments on twitter. But, I want it to be a unanimous decision, not a one man coup.
To enable this legally as the chairman/ceo of a Delaware-C, you are able to alter your voting bylaws. I was advised to plan for a board of 5 members, me and my co-founder and 3 external members. This is solid advice. The trick is to assign, via bylaws, extra votes to specific board roles. I, as chairman get 3 votes, cofounder gets 2, and the other 3 get one vote each.
So, I can be convinced by the board using facts and logic to do something and when I’m obviously wrong, i can be unanimously overruled.
This openai rediculous ouster is exactly the type of situation I was concerned about when I proposed the idea. I’m 100% transparent about this and it seems to act as a great filter. Our lead outside board director is absolutely outstanding.
I discussed this at length with my attorneys when setting up my C-corp for my startup. 2k in legal fees later the consensus was that this will make it extremely unattractive to investors and nobody except superstars will be able to pull this off. Anything more than one member = one vote is looked down upon.
why?
Because they don’t trust you to have more of a say in what to do with the money they invested than them. They want to be equal.