That's news to me. One of the few real powers of the board is to fire the CEO. You don't need to put the CEO on a PIP first. If the board thinks the CEO could do better, that is all that it takes.

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ragall 3 hours ago | parent [-]

The board represents the will of the shareholders. When the CEO is also the majority shareholder with 84% of the voting power, the board better have a damn good reason, otherwise the majority shareholder can simply dissolve the board and appoint a new one, which he did.

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EA-3167 2 hours ago | parent [-]

They represent the shareholders (all of them), but are also expected to act as a reasonable person would for the good of the company. They’re expected to use good judgement, uphold the law and a bunch of other issues. “The majority shareholder says jump off a cliff and we must obey” is nonsense.

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tptacek 2 hours ago | parent | next [-]

They're specifically not supposed to represent the interests of a minority of the shareholders!

That doesn't mean they're required to faithfully represent the interests of any one person with majority voting power, but it does mean they can't select some random subset of minority voters and serve them instead.

	▲	jeltz an hour ago \| parent \| next [-]
		Legally the board has the duty to represent all shareholders, minority and majority, and of they cannot they have to resign.
	▲	EA-3167 an hour ago \| parent \| prev [-]
		I didn’t say that they’re beholden to the minority, they have a duty to ALL shareholders which is generally most clearly expressed through acting in the wellbeing of the company itself.

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ragall 2 hours ago | parent | prev [-]

> but are also expected to act as a reasonable person would for the good of the company

It's the people they represent, i.e. the shareholders, who get to decide what's the good of the company, and the board is simply meant to enact those wishes. This is a constitutional issue of representation: at what point do the elected representatives decide the current situation calls for a referendum instead of an ordinary (representative) vote ?

> The majority shareholder says jump off a cliff and we must obey” is nonsense

If the majority shareholder decides that, then 1) the board must resign at once and 2) any one minority shareholder must sue and have the Delaware Court of Chancery determine that the majority shareholder has abused his powers. I'm not sure what would follow that court decision.