In spring, when the moon rose, it meant time was endless
The basic rule is that the chief executive officer of a company works for the board of directors, and the directors work for the shareholders. Sometimes, though, the CEO is also the controlling shareholder, and this becomes circular: She works for the directors, who work for her. If they disagree, things get weird. If they’re unhappy with her, they can fire her, but then she can fire them.
This doesn’t come up all that often in basic job-performance situations […] It does happen, though: We talked last year about World Wrestling Entertainment Inc., whose board of directors pushed out founder-CEO Vince McMahon after sexual misconduct allegations, and then, as controlling shareholder, he pushed them out.
It comes up more often in mergers and acquisitions, and particularly in going-private transactions. […]
The directors work for all the shareholders, and they can’t just do what the controlling shareholder wants if it’s bad for the other shareholders. But the controlling shareholder gets to pick the board, and if they are too independent she can pick a new board. They can get fired for doing their job too well.
All seven independent directors of DNA-testing company 23andMe resigned Tuesday, following a protracted negotiation with founder and Chief Executive Anne Wojcicki over her plan to take the company private.
It is the latest challenge for 23andMe, which has struggled to find a profitable business model. The stock price rose a penny on Tuesday to $0.35 per share. At that price, 23andMe’s valuation is just $7 million more than the cash on its balance sheet. That represents a 99.9% decline from its $6 billion peak valuation just after going public in 2021. […]
Wojcicki controls 49% of 23andMe votes, giving her a level of control that blocked board members from shopping the company to other potential bidders. She is the only remaining board member after the resignations.
{ Matt Levine/Bloomberg | Continue reading }
The move is almost certainly the final nail in the coffin for the embattled company known for its mail-order DNA-testing kit. Since going public via merger with a special purpose acquisition company (SPAC) in 2021, 23andMe has never turned a profit. […]
The board includes Sequoia Capital’s Roelof Botha as well as Neal Mohan, who took the helm as CEO of YouTube last year after Susan Wojcicki, Anne’s late sister, stepped down.
