OpenAI has a new board, but its directors may still confront the same old problem. The artificial-intelligence startup’s unusual business structure that gave oversight of its for-profit business to a nonprofit board will be an unresolved issue for the new board to tackle. A popular suggested fix: Dissolve the nonprofit, say corporate and nonprofit directors, academics and lawyers. These people say that sorting out that potential conflict of interest will address other governance issues, including the board’s reporting hierarchy and the differing objectives between a nonprofit mission and corporate profit motive. Still others wonder if an area as impactful as artificial intelligence belongs in the hands of a small group of individuals. “A for-profit and nonprofit don’t mix; they have entirely different goals,” said Charles Elson, who has served on the boards of nonprofits and public and private companies, including ice-cream maker Blue Bell Creameries and care provider Enhabit. The board, which formally took over last week, should scrap the current setup and move to for-profit status as soon as reasonably possible, he said. “The confusion the dual status creates is highly problematic.” Sam Altman returned as chief executive of OpenAI after a five-day standoff with the company’s board, which fired him for not being “consistently candid in his communications with the board.” The board was also reconstituted. The new three-person board includes Bret Taylor, the current board chair and former co-chief executive of cloud-software giant Salesforce; former Treasury Secretary Larry Summers; and Adam D’Angelo, the sole remaining member of OpenAI’s previous board and founder of the question-and-answer platform Quora. Altman won’t have a seat on the board and Microsoft, which invested $13 billion for a 49% stake in the for-profit arm, will be a nonvoting observer on the board. The new board will appoint additional directors and possibly explore substantial changes to OpenAI’s governance structure, according to The Wall Street Journal.
Full report : OpenAI’s Unusual Board: Should It Change Its Structure to Govern Effectively?
