One of our department heads is a minority shareholder who matches our core values but clearly does not have the capacity to lead their team as we scale. How do I transition them out of their leadership seat without triggering a legal or financial battle over their shares?

Question

Tyler Smith · Accepted Answer

Being an owner does not grant someone a lifetime pass to occupy an executive seat. If a minority shareholder on your leadership team does not GWC their role, they are actively holding your business back. Your other leaders see this double standard, which completely undermines your accountability culture. You must address this by clearly separating their role as a shareholder from their role as an employee. In their capacity as an employee, they must be held to the exact same performance standards as anyone else on the Accountability Chart. Schedule a direct conversation and use your core values and the GWC tool to show them where they are falling short. Explain that the company's growth requires a different level of capability in their seat, and that their current performance is jeopardizing the value of their own shares. Offer them a choice. They can transition to a lower-stress, individual contributor role where they can actually succeed, or they can exit the operating team entirely while remaining a passive shareholder. Keep your legal counsel informed, but do not let the fear of shareholder friction prevent you from making the right decision for the business.