The Hidden Costs of Panic-Led Decisions

Independent Board members have a tendency to be risk averse for all the obvious reasons. There’s little upside if things go well and a lot of downside if a company is mismanaged.

If the decisions made by OpenAI’s Board were due to panic led-conservatism they’re in for a rude awakening when the lawsuits show up that focus on specific Board members who ignored their “Fiduciary duties” to shareholders.

The Fiduciary Duty of Loyalty is real. Officers and Directors owe a duty of loyalty to a corporation and its shareholders. They are expected to put the welfare and best interests of the corporation first.

It’s easy to claim that Fiduciary Duties were violated if important talent defects from OpenAI and the company has to deal with stopping a complete meltdown.