How regular due diligence assessments of board performance assessment could have saved OpenAI from reputational harm and dismemberment.
Written by Yvonne Cafik PhD (Clinical Assistant Professor, Affiliate Faculty, University at Buffalo, SUNY and Founder, Board Checkup),
The firing of the OpenAI CEO by the board of directors might come as a shock to those who saw this leader as a rising star in the tech industry. However, for those who study nonprofit governance, it is another case of a challenged board-CEO relationship and board ineffectiveness. In analyzing these kinds of problems and cases, the board was either unaware of the underlying issues or got involved too late to do anything constructively about them. This may explain some of the behavior of the OpenAI board, but the duty of loyalty to the firing decision when pressured to retract suggests the firing had more to do with competing values and tensions in and around corporate leadership and nonprofit governance than advancement of the OpenAI mission as the board claimed.
The replacement of the OpenAI board and rehiring of the popular CEO upon the insistence of Microsoft reveals the reality that private corporations, while self-governing, do not exist in a vacuum. More specifically, they are part of a larger governance system that extends beyond the boardroom into the external environment with stakeholders who can make or break the board and organization.
As the OpenAI situation stabilizes, my recommendation for the new board and CEO is to reflect on the underlying issues and challenges to gain clarity on leadership and governance roles in advancement of the mission. To help boards do this, we developed Board Checkup, a confidential online self-assessment tool grounded in a theory of board change and empirical research into the diverse leadership and governance challenges boards of directors routinely encounter. To date, it has helped thousands of leaders safely surface and discuss challenges to higher levels of performance and impact ensuring they never land in the local or national news headlines.
