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.

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.

The demands of the CEO role—focusing on external stakeholders and high-level strategy—inevitably distance them from operational realities. This counterintuitive insight argues against the "Imperial CEO" model and highlights the constant risk of losing touch with the business.

Unlike in private equity, an early-stage venture investment is a bet on the founder. If an early advisor, IP holder, or previous investor holds significant control, it creates friction and hinders the CEO's ability to execute. QED's experience shows that these situations are untenable and should be avoided.

The most common failure mode for a founder-CEO isn't a lack of competence, but a crisis of confidence. This leads to hesitation on critical decisions, especially firing an underperforming executive. The excuses for delaying are merely symptoms of this confidence gap.

A board member's role is to provide outside perspective to help a CEO think through a problem, not to make the decision. CEOs who ask 'what should we do?' risk abdicating responsibility to someone who lacks the deep operational context to make the right call. This can be destructive to a CEO's development.

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.

Even with full board support, a successor CEO may lack the intrinsic 'moral authority' to make drastic 'burn the boats' decisions. This courage is harder to summon without the deep-seated capital a founder naturally possesses, making company-altering transformation more challenging for an outsider.

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."