Dear SaaStr: Who Should Approve Startup CEO Expenses?
I would have the board approve CEO salary, all material expenses (>$5k-$10k), and an overall CEO expense policy. And in fact, once you have VC investors, this is often required in your Investor Rights Agreements or other financing documents. And approving the CEO’s salary is often required under state laws.
In a startup, the reality is a CEO can probably do almost anything they want — up to a point. It’s hard for the investors to really police most activity or even be aware of a lot of it. But just because you can break a few rules, doesn’t mean you should, or that it won’t catch up with you later.
Transparency builds trust.
Get everything approved by the Board.