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Comment by ealexhudson | Hacker News Reader

No board is ever controlled by a CEO by virtue of the title/office. Boards are controlled by directors, who are typically nominated by shareholders. They may control the CEO, although again, in many startups the founder becomes the CEO and retains some significant stake (possibly controlling) in the overall shareholding.

The top org was a 501(c)3 and the directors were all effectively independent. The CEO of such an organisation would never have any control over the board, by design.

We've gotten very used to founders having controlling shareholdings and company boards basically being advisory rather than having a genuine fiduciary responsibility. Companies even go public with Potempkin boards. But this was never "normal" and does not represent good governance. Boards should represent the shareholders, who should be a broader group (especially post-IPO) than the founders.

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That isnt relevant to the question. Sam was on the board prior to all of these other directors, and responsible for selecting them.

The post asks how/why Sam ended up with a board full of directors so far out of alignment with his vision.

I think a big part of that is that the board was down several members, from 9 to 6. Perhaps the problem started with not replacing departing board members and this spiraled out of control as more board members left.

Here is a timeline of the board:

https://loeber.substack.com/p/a-timeline-of-the-openai-board

Actually, you're rephrasing the question - it was specifically about "control", not "alignment".

Even if we substitute "alignment" the problem is that the suggestion is still that Sam would have been "better protected" in some way. A 501(c)3 is just not supposed to function like that, and good corporate governance absolutely demands that the board be independent of the CEO and be aligned to the company goals not the CEO's goals.

Sam was sitting on the board, obviously not independent of the CEO.

> good corporate governance absolutely demands that the board be independent of the CEO

CEOs and subordinate executives being on boards are not unusual, and no board (especially a small board) that the CEO (and/or subordinate executives) sits on is independent of the CEO.

By "independent" I don't mean "functions separately". Of course the CEO sits on the board. Sometimes the CFO is on the board too, although subordinate executives usually _should not be_ (they may _attend_ the board, but that's a different thing).

But fundamentally, the CEO _reports to_ the board. That's the relationship. And in a 501(c)3 specifically, the board have a clear requirement to ensure the company is running in alignment with its stated charter.

Whether or not this board got that task right, I don't know, it doesn't seem likely (at least, in hindsight). But this type of board specifically is there for oversight of the CEO, that's precisely their role.

Could be that the fault lines were already present and they couldn't agree on new members.

Indeed. perhaps it is an example how a small change like the departure of the first member can cause things to spiral out of control.

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