Who’s In Charge Here? Corporate Governance
In case you missed it, there have been some corporate governance issues with OpenAI (i.e., ChatGPT) the last few weeks. Sam Altman was ousted by his Board, which came as a bit of a surprise to one of the Company’s biggest investors, Microsoft. Microsoft, in turn, went and hired Sam Altman and was likely going to bring a number of OpenAI’s employees over to work with him.
At the heart of the disagreement between the Board and Sam Altman was how fast the AI platform was moving and where it was being applied. The Board wanted a much more deliberate and slower approach and Altman wanted the latter. Clearly, there was a breakdown in communication and agreement on the strategic direction of the Company. You would think the Board and the CEO would ultimately be on the same page. Well, that is not always the case.
Ultimately, OpenAI and their Board (w/ a little push from Microsoft) came to their senses and Sam Altman is back in charge. Moreover, there is a new slate of Directors in place as well. There is a lot more to this story, but it brings up a good topic of corporate governance and what is in the best interests of your stakeholders.
What is the role of a company board and it’s executive leadership? Should the board take an active role in the management of the company or let the executive leadership handle that duty? Who does the company serve and which stakeholders opinions provide the best guidance? For perspective, I think the following articles provide some interesting insights on the role of a company board and its executive leadership:
- Directors and Officers: Understanding the Roles of Corporate Management | SCORE
- What is a board of directors? | McKinsey
- What Is The Executive Leadership Team? 33 Board And C-Level Leaders Explain (forbes.com)
- What Makes Great Boards Great (hbr.org)
A board has the job of setting the strategic direction of the organization and putting in place leadership to execute it. Stakeholders, as well, should be acknowledged and listened to, but ultimately its the board and the leadership that run the company. When these roles get confused, problems typically arise and a change needs to be made. Time will tell how the OpenAI story ultimately plays out.
Here are a few other items of interest:
- Executive Edge: Workforce Strategy for 2024 (Stambaugh Ness Webinar 11/29; 2-3pm)
- Bankruptcy and Taxes (eisneramper.com) (11/29; 12-1pm)
- Navigating Federal Grants in 2023 | Insights and Changes (eisneramper.com) (12/7 11am-1pm)
As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com), Erik Spurlin (espurlin@mpl-law.com), Brad Leber (bleber@mpl-law.com) or anyone in our office with questions or comments.
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