Can The Board Of Directors Fire The Owner Of A Company?
The question Can the board of directors fire the owner? is becoming increasingly contentious. CEOs and founders of companies often find themselves out of a job after being fired by means of a vote undertaken by the board of the company. If the person in question is not the owner of a controlling share in the company, there is not much they can do to avoid being fired. Sharing the ownership of a company leads to loss of total control over it. As external investors are brought in, owners shares get diluted, and the founder of a company can often find that he or she owns less than half of the shares in that company. This leaves him or her at risk of being fired. If a CEO has a contract in place, he or she may get fired at the end of that contract period, if the company has new owners or is moving in a new direction. The CEO, despite being the person who incorporated the company, often gets fired in times when the company is experiencing a slump in financial performance. This is because internal company politics and differing leadership styles render people vulnerable. If a founder gets fired, then the companys investors have obviously lost confidence in that founders ability to establish profitability. Or, in the case of a company that is already turning a profit, they do not consider the founder capable of helping the company grow and evolving to meet the needs of a changing market. Strategies for Avoiding Dismissal. Tech Crunch advises executives to always remain defensive, working with key players and building personal relationships with board members and shareholders. These, according to Tech Crunch, are the most important strategies in defending oneself from being attacked by the board of ones own company. Founders and CEOs need to focus on more than the fact that they are indispensable  they also need to recognize the areas in which they are vulnerable. They can do this in a number of ways:  Knowing whether or not a board vote is enough to fire them. Being aware of whether or not alleged wrongdoings need to have taken place in order for them to be dismissed. Keeping ones ears open to listen for complaints and expressions of discontent, and  Being careful of the contracts that they sign. An important step that CEOs can take to protect their position is to get all promises in writing. A CEO should never trust anybody who claims to always have his or her back.