CEO, Director on the Board and majority shareholder?
I'm the founder of a start-up company, and we're setting it up as a social enterprise because the service/product we have is to support youth groups, volunteers and charities. With this in mind, we will initially be getting funding from non-profits and government grants.
To give the company credibility and enhance it's governance I have been advised that I establish a Board of Directors which will include experts in the field; this will also help with funding applications.
Because I'm the founder (it's my idea) I would like to guarantee that I have long-term ownership of the company, with the benefits of a Board.
Could I be a Director on the board, have the majority of shares and be CEO of the company? Would this be frowned upon, that I have too much power? What's the 'done' thing in this situation?
- Anonymous1 decade agoFavorite Answer
Not unusual at all.
In small companies, CEO, Chairman of the Board, majority stockholder & founder are often the same person. How much power you actually have depends upon a number of things, not just titles.
For non-profits and publicly owned companies (as well as some medium sized private companies) the rules can require different structures. Although if my memory serves me correctly, Bill Gates was all of the above at Microsoft for a long time.
- 1 decade ago
Just my two cents' worth:
First of all, we need to understand the meanings of all these terms. Your board set strategic direction for your company. Your CEO is the one who oversees daily operations. Being a majority shareholder, you are automatically one of the directors in the Board. Even if you are the Chairperson, it is not rare that the roles of the Chairperson of the Board and CEO are assumed by the same person. Of course, it is for your company's sake that the more the independent directors the better, but you are not refrained to assume the role of director of the Board, CEO, as well as majority shareholder.