Hacker Bits, April 2016

...it’s your ass on the line when
things go wrong...
ed. For every company that has
ever died leaving behind a pile
of unpaid bills and ruined lives,
there was a point in time when
it could have changed direction,
when there still were options to
affect a gentle landing rather
than a crash.
No matter where you are,
remember this above everything
else: As a CEO, you are ultimately
responsible for whatever
happens to and in your company,
and in some countries that
responsibility translates into
personal liability if and when
things go wrong, especially if it
is determined that you did not
play by the local variation of
the rules and this can have far
reaching consequences. In some
countries, depending on the
severity of the situation, this can
become a criminal matter so be
careful not to assume a role that
you do not fully understand. The
implications of CEO mistakes or
misconduct can be very serious
indeed.
What you are obliged
to do
As a CEO you are obliged to
keep the company on the right
side of the law.
So, for example, if there is
some kind of lucrative shortcut
to making a lot of money but
it is illegal in your jurisdiction
to do so, don’t do it. Even if it
means the difference between
going under and surviving the
long term fallout of such a decision
is potentially much worse
than shutting your company
down gracefully.
As a CEO, you have to avoid
at all costs entering into obligations
that you know (or should
have known) the company cannot
fulfill.
So don’t hire new people
when you know that you are low
on funds and don’t order goods
or services that you know you
will not be able to pay for when
the invoice is due.
As a CEO you have to be
realistic about your expectations
for the near future (say 6
months out) in your day-to-day
decision making. Hope for the
best but plan for the worst and
make sure that the company
does not become insolvent
(that’s a pretty word for being
unable to fulfill its financial
obligations). Do not assume that
promises of future contracts,
payments or funding will materialize
until they do (that is, the
money lands in your bank account)
and do not let hope guide
your decision making — stick to
verifiable facts.
As a CEO you are obliged
to decide on any major issues
facing the company. Inaction,
or postponing a decision for so
long that a situation spirals out
of control is generally speaking
not an option. If that is the way
you want to deal with problems
then it may be better to step
down. The rest of the company
will look to your office for
guidance and resolution. It is
not proper for a CEO to meet
challenges with a lack of decisiveness.
The usual result of a
lack of decision-making power
will be that small problems
become large problems that will
eventually cause the company to
go under.
So, for example if the company
is being sued, do not
ignore the suit; if a big customer
leaves, analyze the impact of
this and adjust course if necessary
while you still can.
As a CEO, you determine the
general direction the company
will move in, the overall strategy
and how that strategy will
be implemented. You allocate
company resources in order to
achieve these goals. In larger
companies, it is common that
you will seek input from others
and if necessary from outside
counsel or the board.
Even so, no matter who advises
you and how insistent they
are, in the end the decisions are
yours and yours alone. If there
is a conflict between the direction
that you think the company
should go in or if there is second
guessing of your decisions,
in the end your word is the one
that matters.
Nobody (and this is a very
important point) can make you
do something that you are not
comfortable with. If there is a
conflict about important matters,
the board (assuming you
have one) or depending on the
situation, the shareholders can
fire you. But, they cannot make
you do anything at all that you
do not agree with.
This is especially important
when a company gets into hot
water (for instance, when it is
20 hacker bits