Page 450 - Ray Dalio - Principles

There are one to three chairmen working with seven to

fifteen board members supported by staff, whose purpose is
primarily to assess whether: 1) The people running the
company are capable; 2) The company is operating in
accordance with its agreed-upon principles and rules. The
board has the power to select and replace the CEOs, but
doesn’t engage in the micromanagement of the firm nor the

people running it, though in the event of an emergency, they
can drop into a more active role. (They can also help the CEOs
to the extent they want it.) While Bridgewater’s idea
meritocracy is ideally all-inclusive, there need to be various
circles of authority, trust and access to information, and
decision-making authority, which are shown in the chart’s
three circles.

e. Make sure reporting lines are clear. While this is important
throughout the organization, it is especially important that the
reporting lines of the board (those doing the oversight) are
independent of the reporting lines of the CEOs (those doing
the management), though there should be cooperation between
them.

f. Make sure decision rights are clear. Make sure it’s clear how much
weight each person’s vote has so that if a decision must be
made when there is still disagreement, there is no doubt how
to resolve it.