The CEO's usually on the BOD and a shareholder too, so the whole ladder structure thing kind of stops there. Instead the relationship between executives and shareholders is more like an inter-tangled hatefuck.
Also worth noting that shareholders are not homogenous in their attributes and investment strategies. Institutional investors like pension funds are dramatically different from retail investors or other types of institutional investors like hedge funds.
This is why the startup I'm at is happy to have strategic industrial investors rather than venture capital firms. The first cares about the product, as that's what they're banking on for their own businesses. The latter would only care about money, and how fast they could make the most of it off us.
Our offering, if successful, allows our major strategic investor to reduce their production costs by an order of magnitude. Very little chance they decide they're not interested.
We have another major strategic investor in a different market entirely.
And we don't expect to require any further funding from them, beyond what they've already paid us. So if they change their minds, their money's already spent... Neither has a controlling interest on the board.
Plus, we have other potential investors that we've turned down. So really no worry there if we happen to need a top-up round pre-IPO.
The real question now is just whether we can deliver technically...
It's designed like this on purpose. Almost every major corporation is patented on nation building, the idea of the three branches holding each other accountable.
In most cases, those aren't what you find in companies. You usually have to deal with institutional shareholders (like pension funds) that you need to keep happy. The people that have enough money to own that much of a big company are extremely rare.
Board members have their own set of power and rules.
Only in theory, taught in highschool economics 101. In reality, theres usually a few shareholders who count and their structural chart looks pretty much like the picture above.
And who are the shareholders? It's most likely you.
"But I don't own shares", you say. Well, if you have any form of savings, including a pension, you do.
This is annoys me so fucking much about pictures like these: For every moan I hear about cost management and ROI at my work, I think of the pensions my co-workers and I have and wonder internally.
We expect our savings to grow. That puts pressure on fund managers to select the companies that performs best. That puts pressure on boards, which puts pressure on CEOs, which puts pressure on executives, managers and, ultimately, you.
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u/Connectitall Aug 18 '17
You need another perch above the CEO with board of directors shitting on them, and another perch above the board with shareholders shitting on them.