Corporate Governance

The systems and relationships through which companies are directed and controlled — most practically, the board–CEO dynamic.

Xavier Helgesen’s thread on As an Entrepreneur, I Have… (tweet) (1,000+ board meetings) distills the pattern into the Good Director / Bad Director frame: a Good Director knows their two jobs are (1) hire and compensate the right CEO and (2) approve the budget and strategic plan. A Good Director trusts the CEO completely until they don’t — there is no in-between. A Bad Director confuses governance with management: they think their job is to supply ideas and micro-manage.

Key governance mechanisms: making it safe to share bad news, hitting one or two home-run assists per year (a recruit, a partnership, a new investor), reading board materials in advance, never undermining the CEO in front of their team.

Where this appears

• As an Entrepreneur, I Have… (tweet)