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On the Netflix series Iron Fist, the Rand Enterprises board of directors eventually

grows so exasperated with Danny’s altruistic antics that it fires him, Joy, and Ward.

As stated in the seventh episode:

LAWRENCE: The board just held an emergency meeting.

JOY MEACHUM: About what?

LAWRENCE: About how you, your brother, and Danny will no longer be on the board…or any part of this company ever again.

It makes sense that Joy or Ward could be fired, since company boards of directors generally have ultimate control of the hiring (and firing) of officers (such as Joy, Ward, and Danny), and without controlling shares Joy and Ward couldn’t dismiss the board members.

However, Danny possesses 51% shares (controlling interest) in the company, and as such can appoint and fire members of the board of directors, among a great many other unilateral decisions. As repeatedly demonstrated earlier in the series, Danny was able to get the company to do basically anything he wanted (whether or not it made good business sense), from ordering that the Staten Island chemical plant be closed down, to requiring that drugs be sold at cost. As he didn’t have a job title, this was simply a consequence of his controlling share. Firing him wouldn’t prevent him from dismissing the board members and reappointing sympathetic ones, or exercising any other authority over the company that he chose as a consequence of his controlling share.

How did they think this would work?

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  • 6
    I have a board?
    – Rand al'Thor ♦
    Mar 19, 2017 at 2:55
  • @Randal’Thor - I suppose so.
    – Adamant
    Mar 19, 2017 at 2:58
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    I believe that what Danny can do with his 51% depends on the corporate by-laws. Its possible that he can 't hire/fire board members at will, but only when an election happens. Still, at best those board members bought themselves a tiny reprieve.
    – KutuluMike
    Mar 19, 2017 at 11:37
  • 3
    (the 51% number makes little sense anyway; he supposedly has it because his Dad had it; that would imply that Harold Meachum had 49% which his kids should have inherited as well. Who owned that 51% before Danny returned, how was it never sold, how did they never issue more stock to dilute his shares, etc? The whole thing is typical TV business nonsense.)
    – KutuluMike
    Mar 19, 2017 at 12:01
  • 4
    This is what happens when people who majored in creative writing try to represent the business world. ;)
    – starpilotsix
    Mar 19, 2017 at 13:09

1 Answer 1

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First, I will concede that you may be right regarding the Meachams. Without knowing more about their contracts or size/stipulations of their minority shares, its impossible to know how their severance would work. It still seems unlikely that they wouldn't have safeguards in place, but given the lack of knowledge I will let that point go.

As for Danny. It is very clear that he is not only the majority shareholder but also now the chairman of the board. As a result it is almost impossible for the board to completely freeze him out. As I am currently working towards my EMBA, I decided to ask my professor today for clarification (well at least a similar hypothetical situation). He explained that while the board can certainly push Danny out, he can easily reconvene the board, and fire them all. As you indicated, he simply needs to push the rest of the board out, and then appoint members loyal to him. None of this requires him to have any formal position within the actual company.

The only way that what the board did would be accepted is if the contract he signed had some pretty outrageous stipulations included. Given his representation's goal to re-instate him to his rightful place in his family's company and provide him safeguards, this seems extremely unlikely.

That being said, it is likely that the board members would also have stipulations in their contracts, but now we are simply going in circles. If the board had stipulations in place to prevent their firing under normal circumstances, it would be crazy to think that Danny would not have the same stipulations at the very least. This would have prevented the board from removing him in the first place.

I will concede the fact that it is unlikely Danny read even one page of his deal, or even cares that he we was ousted, but that doesn't change the fact that Hogarth's firm would have done everything possible to protect Danny's shares and position. They want to keep their exclusivity as primary council after all.

To help, I have provided a couple of sources below.

http://www.businessinsider.com/r-corporate-founders-battle-boards-to-overturn-forced-exits-2014-15

http://www.stimmel-law.com/en/articles/corporate-struggles-who-has-what-power-when-push-comes-shove

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  • 2
    By Carrie-Ann Moss firm, I assume you mean Hogarth’s firm?
    – Adamant
    Mar 20, 2017 at 5:03
  • Yes, updated for universe accuracy
    – Charles
    Mar 20, 2017 at 5:11

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