Ask HN: Should board members also be investors/shareholders?

2 pointssprocketonline9y ago1 comments

It seems that when a major investor provides cash they also put a director on the board.

Does this create a conflict of interest?

e.g. This HBR article alludes to Enron's board still buying shares at the time of Enron's demise: https://hbr.org/2002/09/what-makes-great-boards-great

Should you have board members without any investment? Does this help with their role as an independent source of advice & direction, or does it end up with them being disassociated and uninterested?

Is it an expectation that board members, when appointed, should be provided with stock opportunities?

What's your experience been? I would like to hear the viewpoints of both founders, investors and board members. Do you have any good articles, books or reference material on this subject?

1 comments

grizzles9y ago

Yes. It's called having skin in the game. It aligns financial incentives with other shareholders.

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