How do I deal with a directors’ feud?

A personality clash between two of our board directors has turned into a feud. As founders, both are key members of the company and bring significant value in terms of strategic direction but their squabbling is starting to disrupt the efficient running of our business. Should I resolve this by firing one or both of them?

A. Matthew Peacock of Hanover Investors writes:

Firing sounds like a last resort if the founders are contributing. So the situation warrants more analysis, particularly given that disagreements between board directors seldom boil down to personality alone.

In order to solve the problem we need to understand whether this is a difference of personal prejudice or of corporate direction. It’s not the company’s job to cater for the interests of any one shareholder but it may be in the interests of the company to solve their problems. A founder’s personal interest is often difficult to disentangle from the company. Hence the best solution may be to deal with the individuals’ issues, even if only to create a short term alignment of the board’s interests for the purposes of a satisfactory outcome for all the shareholders. Alternatively, if this is a difference of view on corporate direction it may not be a bad thing. Differing views on direction become a problem when the board has made its decision and an individual cannot unite behind the decision. Differing corporate views are good – they ‘stress test’ the company’s decision making – but a lack of common purpose is a killer and needs to be dealt with. So, understand the problem and strive for a solution, but bear in mind no price is too high for a united purpose in a growing company, even if that is firing a founder.


(will not be published)