CHAPTER 23 Challenges in the Boardroom

“The fundamental cause of the trouble is that in the modern world the stupid are cocksure while the intelligent are full of doubt.”

—Bertrand Russell

Venture-backed boards undergo considerable stresses when a portfolio company faces challenges. These manifest as:

  • Resource challenges
    • Sales growth is slower than anticipated.
    • Cash position is weak.
  • Performance challenges
    • Milestones have not been met.
    • Value creation steps have not occurred within projected timelines or prescribed budgets.
    • Loss of key accounts or major clientele.
    • Loss of key executives or churn of talent.
    • CEO transitions.
  • Market-based/external challenges
    • Constrained market conditions affect sales or future financing.
    • Competitive forces disrupt the company's progress.
    • IP-related matters cause unforeseen issues.

When Arthur Rock resigned from the board of Apple, he was irritated by the chutzpah displayed by Steve Jobs. “They took a two-page ad in every newspaper you could think of, announcing that they were ready to ship the PowerPC, which I did not know they were going to manufacture—but that's not important—but that they were going to kill Intel. Literally—that's what it said. At that point, I resigned,” he would say.1

Patterns of emotional behavior manifest in wide-ranging forms, including ego games designed to impress friends, actions taken to save face, self-interested actions, and personal vendettas, according to Pascal Levensohn. Left unchecked, the force of ...

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