Horowitz argues that a board's primary function isn't just strategic advice, but to legally protect the CEO. Running material decisions like equity grants past the board shields the CEO from personal liability and lawsuits—a danger many founders underestimate.

Under Delaware's "Revlon doctrine," if your company is for sale, the board's fiduciary duty shifts. They are no longer guardians of the company's mission but are legally required to act as "auctioneers" to get the highest possible price for shareholders.

While founders often view board seats as a sign of commitment, many VCs prefer an observer role. This allows them to receive crucial information about company progress and upcoming financings without taking on the legal risk and fiduciary duties associated with being a full director.

The selection of an independent director is rarely a unilateral decision. Legal documents often structure the process so that one side (e.g., the common stockholders/founders) nominates a candidate, but the other side (the preferred stockholders/investors) must approve them, creating a mutual veto power.

Founders cannot unilaterally remove a director appointed by investors. Preferred stock financing documents grant a specific stock series (e.g., Series A) the exclusive right to elect and remove their designated board member. Common stock votes, even super-voting shares, have no say over these specific seats.

Horowitz argues that forgoing a board is a massive legal risk for CEOs. A board's primary function is to provide a legal shield. Running material decisions, like equity grants, past the board protects the CEO from personal liability and lawsuits from shareholders. Without this process, founders are dangerously exposed.

Most founders don't realize the standard "any lawful purpose" clause in their corporate charter creates a fiduciary duty to maximize shareholder value. This seemingly innocuous phrase can legally compel a founder to accept a buyout from an undesirable acquirer, even with founder control.

The "best practice" of loading boards with independent directors is flawed because they often lack significant ownership. Their loyalty trends towards the norms of the broader financial system and their professional network, rather than the unique, long-term mission of the company they govern.

A once-buried clause in security agreements allowing lenders to 'flip the board' upon default has become a critical remedy and a key point of negotiation. Lenders now focus intently on the required notice period, with some refusing deals that don't allow for immediate action.