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 20th-century view of shareholder primacy is flawed. By focusing first on creating wins for all stakeholders—customers, employees, suppliers, and society—companies build a sustainable, beloved enterprise that paradoxically delivers superior returns to shareholders in the long run.

Filing to become a Public Benefit Corporation (PBC) is a simple legal step with almost no downsides. It enshrines a specific purpose in your charter beyond shareholder profit, giving the board legal cover to reject purely financial decisions that would harm the company's mission.

Costco inherited its customer-first ethos but added a critical component: a 'governance fortress.' This structure intentionally protects the company's long-term mission from short-term investor pressures, demonstrating that a strong ethos requires structural defense to survive.

AI firm AMP is structured as a Public Benefit Corporation (PBC) to legally justify its strategy of providing compute at-cost to portfolio companies. A traditional C-Corp structure would expose it to shareholder lawsuits for 'destroying value' by not maximizing profit on its core asset. The PBC charter protects this non-traditional, ecosystem-building model.

Choosing a Public Benefit Corporation (PBC) structure is a strategic legal defense. It shields a company from shareholder lawsuits when making decisions—like providing compute at cost—that prioritize long-term ecosystem value over short-term profits, protecting the firm's core mission.

To protect its 'safety first' mission from investor pressure, AI company Anthropic created a 'Long-Term Benefit Trust.' This separate body, staffed by mission-aligned trustees, has the legal power to appoint board members to the for-profit entity, creating a structural guardrail against mission drift.

Most corporate charters vaguely permit 'any lawful act or activity.' Eric Ries advises founders to replace this with a specific purpose, such as 'to maximize human flourishing by doing X.' This small legal change creates a powerful defense against future pressure to compromise on core values.

Both companies leverage their independent ownership to make long-term, values-driven decisions that might be challenged by public market investors. This structure provides the freedom to prioritize purpose over immediate profit, such as restraining growth or making bold political statements.