NEW YORK - Fortune quoted Jamaal Glenn in a report by Lila MacLellan on FTX's lack of an independent board and the governance risks created when founders retain unchecked control.
MacLellan's report examined why private-company CEOs resist independent directors even after taking institutional capital. Glenn told Fortune that the preference for insiders is understandable but dangerous: executives can build “CEO-fiefdoms” and surround themselves with yes-men rather than directors prepared to challenge management.
“Companies should start thinking about boards as soon as they raise their first round of institutional capital, and they should start thinking about independent directors shortly after.”
Glenn argued that directors do more than police a company. They contribute expertise that helps a business scale, add discipline to major decisions, and apply sound corporate governance before a crisis exposes what is missing.
He did not call for regulators to mandate independent directors at private companies. Instead, he said institutional investors and banks should use their influence to push companies toward outside oversight - “Let's call it marketplace incentivization or coercion.”
The lesson from FTX was not confined to cryptocurrency. It concerned the recurring willingness of investors to suspend ordinary business controls when a founder is treated as exceptional.
About Jamaal Glenn
Jamaal Glenn is an executive, investor, entrepreneur, writer, speaker, and board director. He is Chief Financial Officer of SoLo Funds and founder and CEO of JG Holdings. He chairs The Pivot Fund and serves as a board director, treasurer, and audit committee chair at LION Publishers.