Reed Hastings argues board members lack daily context to add value with advice. Their true function is to be an "insurance layer," with their most crucial responsibility being the decision to replace the CEO if needed. They must learn the business not to advise, but to be prepared for that moment.

To succeed on an executive board, you must shed your functional hat. While you bring expertise from your area (e.g., marketing), your primary responsibility is to consider the health and growth of the entire company. A 'total company' perspective is essential for credibility and impact at this level.

Companies naturally deviate from their core values due to an unconscious influence called "financial gravity." This force alters behavior as leaders imagine what might please investors, leading to compromised decisions long before any direct pressure is applied.

Effective private equity boards function as strategic advisory councils rather than governance bodies. Board members are expected to be co-investors who actively help with strategy, networking, and operational challenges like procurement, making them a key part of the value creation engine.

Lyft's co-founders recognized a common corporate governance weakness: boards are often too far removed from customers, focusing instead on finance and high-level strategy. They recruited David Risher specifically for his "customer obsession" to bring that critical perspective into the boardroom.

Horowitz cautions against board members having daily, high-frequency interactions. A CEO ultimately must stand alone and develop high conviction to make difficult decisions. Constantly looking to an outsider for answers can stunt this growth and lead to poor outcomes, as the outsider lacks full context.

Data since 2008 shows that companies with so-called "bad governance"—often founder-controlled with less board independence—have, in aggregate, financially outperformed those following conventional "good governance" best practices, challenging the entire framework.

CEOs are often exceptional at building relationships, which can co-opt a board of directors. Directors become friends, lose objectivity, and avoid tough conversations about performance or succession, ultimately failing in their governance duties because they "just want them to win."

VCs offering capital without a board seat frame it as founder-friendly control. However, it's often a self-serving strategy that allows the firm to deploy more capital with less hands-on work, robbing founders of a dedicated partner for governance and strategy.