How did the board plan pull this off if Mullenweg has 84% of the voting shares? For that matter, what is even the purpose of a board in a multi-class share structure with the founder holding above 50% voting shares.
I guess it was mostly advisory, with the added purpose of making it seem like the various organisations were stewarded by members of the community that were not Matt Mullenweg.
Delaware law requires a board.
Whether limited liability should actually be allowed at all in such a situation is a better question.
You can't know what other conditions Mullenweg signed in contracts such as shareholders agreements etc.
Typically if you take VC money, the VCs will require the ability to sack the founder and take control, perhaps if particular targets are not met.
I've seen it: an ambitious owner agreed to stretch goals, and the VCs took took over the company from the founder after they had predictably failed to meet the goals.
Founders are almost always outnumbered on the board by Series B, but like I speculated in https://news.ycombinator.com/item?id=49638676, Automattic is unusual here, and Mullenweg may control it. There's still a decent chance that True Ventures left in protest rather than being booted, though, and has the right to a seat[1]. It's just, what's the point if Mullenweg has them beat 4-1?
1. Edit: The article confirms that Toni Schneider resigned, but not whether True Ventures (his firm) has the right to a seat.
https://ilyastrebulaev.substack.com/p/who-controls-your-star...
What's not normal is any kind of special investor right to sack the CEO unilaterally.
> what is even the purpose of a board in a multi-class share structure with the founder holding above 50% voting shares.
This is a question about governance in general. The details of what happened at Automattic are irrelevant.
It's nice to imagine things; I was once a kid as well, and imagination is the most powerful force on the planet, no doubt about it. I've been a scientist for 15+ years, so trust me, I know how nice it is to daydream about the "could-be"s and the "possibilities".
But, unfortunately, reality takes precedence over imagination. It's like these Avengers and Star Wars movies, I'm sure you've enjoyed them. It'd be really, really, really fun if they were real... but they're just... not, you know? On my end, I was fortunate enough to learn this during my teen years. It's good to let your imagination run wild, but always keep a foot in reality. It will save you a lot of trouble.
I took my time to explain this because it is a topic I have devoted a lot of time to, and I wanted to share it with you with the best intention of improving your life as well. I wish you the best with that, lad :).
Anyway, back to the topic at hand. The reality is that Matt had all the cards in his hand, and no amount of "argumentation," Hacker News armchairing, good wishes, or "imagination" will ever change that. You could ask the ousted board members if it did! Lmao.
Of course, one might discuss what would've happened if Matt had lost. If the terms were different, if the board had more power, or as another young fella here was saying, "what if they signed a clause that says they cannot be ousted", I mean, those are all really interesting topics to discuss, don't get me wrong, but it is also equally interesting to talk about other imaginary things here like, "what if we had wings and could fly?" or "what if we didn't need to eat and drink water?" and so on.
With no intent to diminish the power of imagination, I was respectfully arguing from the point of view of reality.
The fact that they were subsequently fired doesn't make it into a performance. It's still a board resolution.
Subsequent to that, they were removed from their positions. Failure is a subjective assertion that implies that they had some idea that they were going to do something different than what they actually did, but that doesn't seem supported by any of the actual facts.
Seems to me they successfully communicated that their judgment and decision was that he should be fired, and are no longer responsible for the outcome, as they've been removed from their fiduciary duty of making judgments like that.
Boards have the power to decide any and everything in a corporate structure. They are, in fact, the only way that a decision of the corporation is made and made official.
I'm not sure what legality has to do with any of this. A corporation is a legal structure, and a board is its decision-making body. If you're talking about criminal charges or disputes between parties about who's got the power or authority to do something, then those are decided by courts, but in a civil context courts don't originate decisions. Courts ratify decisions or choose between dissenting views on what the decision is.
The members of the board should have recognized the special nature of this situation, and take the only principled course of action possible here: resign and sue to have the CEO removed and barred; instead they let the interim CEO give himself a golden parachute (so much for protecting the shareholders, he was protecting his arse).
The CEO can't fire the board. The board can fire the CEO.
The majority of shareholders can fire the board.
The fact that one person plays the role of two of those actors is interesting but one of the whole points of corporate governance is that everybody plays their actual role when they're in that role and assigned to do that role.
In that context the board tasked with making a decision on who should be CEO made a defensible decision and then they were fired by the shareholders who disagreed. This is exactly what's supposed to happen. Everything is by the book.
He can when he's the majority shareholder.
> but one of the whole points of corporate governance is that everybody plays their actual role when they're in that role and assigned to do that role.
Where do you think you are ? In Victorian England where everyone dutifully plays one's role with a stiff upper lip and never tries to abuse power ?