OpenAI’s board fired CEO Sam Altman.
Harvard University’s governing board did not initially fire President Claudine Gay.
Both decisions seem to have been driven by the board’s altruistic mission rather than the interests of OpenAI or Harvard as organizations.
The decisions by these two boards and the ensuing debates invite a discussion of the board of directors’ role in the governance of a company or non-profit organization. What is the board’s role in deciding the future of the company? Who is the board representing, or what interests does it represent when making important decisions? What obligations does the board have to the company and its employees as opposed to outside, non-shareholder interests or the personal interests of board members?
Both Sam Altman and Claudine Gay are celebrities in their worlds. OpenAI introduced ChatGPT, and Altman became the most visible spokesman for the artificial intelligence (AI) revolution. Gay was the first black woman president of Harvard. While different in the details, the decisions of the Harvard and OpenAI boards are quite similar, and both are troubling.
OpenAI
A non-profit board of directors with a mission of developing AI “for the benefit of humanity” controls the for-profit company OpenAI. AI’s potential for replacing human workers and making “human decisions” drives a debate about how to protect human society from AI. OpenAI’s mission to develop AI for humanity’s benefit is an expression of “effective altruism.” According to these beliefs, all work and investments must be for the benefit of humanity and align with “human values” rather than maximizing shareholder value. Board members like Helen Toner argued that the board’s mandate was to represent the interests of “humanity” and not investors. The future existence of OpenAI as a company was not the board’s goal.
Effective altruism has a strong following in Silicon Valley, with significant investor support for its proponents like OpenAI. For example, Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX, was a financial benefactor before his conviction for fraud.
As a controversy developed in 2023 over whether OpenAI was sufficiently concerned about AI safety, two board members resigned, leaving the board controlled by true believers in effective altruism. With no notice about issues between the board and the CEO, the OpenAI board told Altman he was fired. The board issued a statement saying that he had not been “consistently candid” with the board, and it had lost “confidence in his ability to continue leading OpenAI.”
Candor and trust between the CEO and the board are essential. The CEO often believes the board does not understand the complex issues facing the company, and the board often believes the CEO is not being fully candid. Trust and candor are priorities that can be difficult to manage with high-energy CEOs like Altman in high-growth companies like OpenAI.
By all appearances, the OpenAI board fired Sam Altman because they did not believe he was sufficiently aligned with their effective altruism mission of protecting humanity from AI. After the firing, most staff threatened to resign if the board did not reinstate Altman. Microsoft said it would hire Altman and the OpenAI staff to continue their work. Eventually, the OpenAI board resigned, and a new board rehired Altman as CEO.
Harvard
Claudine Gay testified December 5 before Congress along with University of Pennsylvania President Liz Magill and MIT President Sally Kornbluth. When asked if advocating for the genocide of Jews conflicted with university policy, Gay and the other university presidents gave what appeared to be evasive answers. This testimony came after their seemingly ambivalent statements about Hamas’ October massacre of 1,200 civilians in Israel.
“It depends,” was the university leaders’ response. Their position was that the university must balance the interests of free speech against the interests of those who might feel offended. The Harvard and Penn communities – faculty, students, alums, and donors – responded with strong and conflicting views. Some student groups demonstrated in support of Palestine, while alums asked why advocating for Jewish genocide was not clearly against university policy. Jewish students felt threatened, and free speech has not been a campus priority.
Penn’s President, Liz Magill, soon resigned along with the board’s chair. She had lost the confidence of many alums and donors. The Harvard board issued a statement reaffirming “our support for President Gay’s continued leadership of Harvard University.” Gay resigned in January following continuing controversy about her testimony and reports of plagiarism in her academic writing.
The Harvard Corporation, the oldest corporation in the Western Hemisphere, governs Harvard University. Its board members are deeply connected to the University. Several members currently work at Harvard, and others were in the Obama administration. They are not “independent directors” with different life experiences and points of view.
The controversies over Gay’s statements have significantly damaged Harvard’s reputation. Nevertheless, the board did not ask her to resign. When the board hired Gay, they expressed their mission goal of making a black woman President of Harvard. If the board fired her, they would be firing the first black woman President. The board would not go against its altruistic mission even when doing so harmed the University’s reputation.
I am an alum of both Penn and Harvard. I am not sure “firing the President” was the right board response for either university. Clearly, something dramatic needed to be done. Simply “reaffirming support” was not the right response. As I have written elsewhere, these leaders must speak clearly about Right and Wrong to their communities and for their communities. That did not happen. The university boards have a responsibility to make decisions in the long-term interests of the schools and not simply be advocates for their personal altruistic mission preferences.
The OpenAI and Harvard boards made important decisions for their organizations drawing primarily on their board members’ personal interests. The Harvard board’s Dec. 12 statement said President Gay is the right leader to “address the very serious societal issues we are facing.” The board decisions expressed board members’ altruistic mission goals rather than the best interests of their organizations. These decisions are no different than a board member advocating for their personal financial interests as a shareholder rather than the interests of all shareholders.
Key Takeaways
When you are bringing someone on a board, talk about the board’s responsibilities when making decisions for the company or organization. Ask why the new member wants to be on the board and what they hope to accomplish through a board position. Talk about what they see as their role on the board and how they expect to participate as a board member. If you are considering going on a board, ask the same questions for yourself and ask what drives board decisions now. If you are a significant investor and want your views to be considered by the board, become a board observer and not a board member.
Rick Williams is a director of Amorphex Therapeutics, advisory committee chair of Career Town Network Inc. and a member of the Private Directors Association board of directors. He is also founder and managing director of Williams Advisory Partners, author of the book Create the Future, and formerly served as a management consultant with Arthur D. Little.