Boardroom INSIDER for… DECEMBER

THE HIDDEN BOARD FLAW THAT TRIGGERED OPENAI’S MELTDOWN

Late November saw the world of corporate governance (and also business, society and science) shaken up by the boardroom turmoil at OpenAI.  An organization at the bleeding edge of creating (and regulating) generative artificial intelligence saw its CEO Sam Altman sacked by the board for mysterious reasons.  Then, blowback from big AI investors, such as Microsoft, and top OpenAI talent drove a counter-coup that brought Altman back and tossed most of the board — “all in a Silicon Valley minute,” according to the December issue of online governance monthly Boardroom INSIDER.

Yet BI publisher and boardroom speaker Ralph Ward writes that Open AI’s leadership problems were built in to its “odd governance structure, more like a think tank than the Next Big Thing.”  Ward notes that as a nonprofit that formed a massively successful for-profit AI subsidiary, OpenAI’s operational tail was wagging the governance dog.  Also, the OpenAI board “was self-selected, owed a fiduciary duty to no one, and had a very vague mandate.” 

Worse, boardroom basics, such as detailed agendas, proper meetings, and full board info seem to have been disregarded.  At the board meeting when Altman was sacked, the board chair wasn’t even present.  Ward summarizes that “the board didn’t function like a real board because it wasn’t.”

  Also in Boardroom INSIDER for December…

Hottest boardroom tech trends for 2024
How the rules on CEO succession planning have changed
Q&A: Should we try a millennial “shadow board” for strategic insights?

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