“The board” – to the uninitiated, a shadowy cabal of anonymous figures constantly clipping plucky and dedicated founders’ wings and scheming to remove them in the process of jostling for position.
In reality of course, this is not the case – but it makes for good drama. The recent real-life debacle at OpenAI has done little to dispel this enduring stereotype, and at the time of writing that board’s decision to remove the founder and star of the show, Sam Altman, and then reinstate him following pressure from key investors and employees seems particularly bizarre.
The ins-and-outs of what actually happened at OpenAI may never fully come to light, but as things stand the communication from the individuals concerned has been incredibly poor and has highlighted their lack of experience, regardless of whether they were acting in good faith, and with good reasons, or not.
What this also highlights however, is the danger in vilifying a group of people who, in the normal course of business life perform a vital function. The board’s chief function is, or should be, to act in the interests of a company’s shareholders, if it has them, to keep founders and C-Suite executives honest by asking difficult questions, refusing to be fobbed off and, if necessary, by taking action. This action will vary depending on the role and remit of the board. For example if the company has a fiduciary board, it may have the power to remove senior figures from post, although this is more usual in cases of fraud or other corporate wrongdoing, rather than the vague assertion of “not being consistently candid” offered by the OpenAI board.
As talk of recession lingers and VC money continues to dry up, many businesses are facing tougher economic conditions than they have for many years. Boards are set to play an increasingly important role in ensuring companies have the resilience to weather this economic storm and survive to prosper in better economic times.
Despite the sneering about the relatively inexperienced board of OpenAI being “at the kids poker table” etc. there are good reasons for companies large and small to have a board in place. It ensures that commercial decisions are made for solid financial reasons, rather than at the whims of charismatic leaders with loud voices and, in the case of smaller companies, it embeds robust business practices across the organisation from day one – a huge advantage should the aim be to sell the business at a future date.
Whatever the truth behind the OpenAI storm, the fact is that the history of commerce is littered with scandals that could have been avoided, or at least been caught earlier, if board members hadn’t been caught napping. Take, for example, the recent Wirecard case, where clear signs of corporate malpractice were either missed or deliberately ignored, tarnishing the reputations of almost everyone involved including its auditors Ernst & Young.
Despite being a midsized company, Ballou already has a board of senior advisors in place doing an outstanding job of guiding the business in the right direction day-in-day out. By acting as a check-and-balance on commercial decisions and a sounding board for the implementation of new processes and business development initiatives, this group serves an invaluable purpose.
In all honesty, we wouldn’t be where we are without them, but then I suppose that doesn’t make for such juicy headlines, does it?