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Do you know about the theory of rational thought? The theory of rational thought has at its core the basic assumption that people will act in a logical manner. Now, if that was true, then a great startup CEO would have much more power than a board of directors because a great startup CEO is running the company, not the board of directors.
A great startup CEO will have much more effect than the best board of directors ever will on the success or failure of a company.
After all, you’re there every day, working to build your company. You’re intimate with every detail, every nuance of your company. There’s no way a board of directors that you meet with every six to twelve weeks can have the same depth of knowledge about your company.
But, it only holds that a great CEO will have more power than the board of directors if the board is acting rationally.
What happens if the board is acting irrationally and you, the CEO, are doing a great job?
All bets are off in this scenario. And guess who has more power?
The board of directors has more power than the CEO because the board can fire the CEO.
