Coinbase Independent Directors Have Close Company Ties | Hacker News Reader

Coinbase Independent Directors Have Close Company Ties

wsj.com

112 pointsgist8 comments

I think the two board members mentioned definitely fail the "Independent" test but in the grand scheme of things at least Fred Wilson as a VC has a basket of other companies that he/his firm own shares in so he's not as materially invested as Fred Ehrsam is (not condoning Coinbase labelling either as independent, just adding some colour to the discussion).

Unfortunately companies do this a lot, and even companies that are in the public eye. I think I read somewhere (Damodaran's blog) that when Disney was being run by Michael Eisner, half the board was insiders and some of the independent directors included the CEO's personal attorney, his kid's school teacher, etc.

https://archive.is/cxCBk

The article does a good job of explaining why Fred Ehrsam is not independent. But it doesn't really give an argument why Fred Wilson shouldn't be considered independent. Given that Fred Wilson is a very successful investor, having him working to protect investors interests seems somewhat reasonable?

Perhaps I misread the situation however.

How different is this from other companies' practices?

Yeah, so?

You know how defensive proponents get when critics of cryptocurrencies say the space is risky and full of scams? This kind of scrutiny is normal in the business world, especially when trying to raise money on the stock market where there are rules and regulations about accurately disclosing information to potential investors.

You appear to be invested in the space so ask yourself whether reflexively blowing off routine financial reporting helps or hurts that “full of grifters” reputation.

One small thing to note is that as it says in the article, Coinbase isn't actually trying to raise any money (it's a direct listing). IMO this actually makes it worse as much of the rationale for the company going public in the first place is these same insides wanting to cash out.

A company cannot identify an independent board member randomly. There are laws for that as well:

e.g. * When determining whether the members of a committee of the board of directors are independent, the registrant's definition of independence that it uses for determining if the members of that specific committee are independent in compliance with the independence standards applicable for the members of the specific committee in the listing standards of the national securities exchange or inter-dealer quotation system that the registrant uses for determining if a majority of the board of directors are independent. If the registrant does not have independence standards for a committee, the independence standards for that specific committee in the listing standards of the national securities exchange or inter-dealer quotation system that the registrant uses for determining if a majority of the board of directors are independent.*

https://www.law.cornell.edu/cfr/text/17/229.407

Reply on news.ycombinator.com