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this post was submitted on 20 Nov 2023
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Technology
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The reason the board have given is - if true - a very reasonable reason to fire a CEO. The job of the board is to oversee, scrutinise and challenge the management, and if the management were lying to or withholding information from the board then that's an obvious reason for the management to go.
American corporate governance standards are really hit-and-miss, and in a lot of these tech firms you often end up with situations of CEOs doubling up as chairs of their boards - e.g. Musk, Zuckerberg , Bezos -something that structurally neuters the ability of the board to do its basic job of challenging the CEO! So when I see an American board standing up to a CEO that's trying to evade scrutiny, I feel that's something that should be applauded.
Sure.. but they didn't just fire the CEO. They also fired a third of the board members including the chair of the board. And they did it with zero notice, zero discussion, just "You're out. k-cya-bai".
And then they fired their interim CEO a day later.
Yes, they have the right to do all of that... but they need a bloody good reason. In this case the reason was so insignificant they seriously considered changing their mind and reinstating everyone. WTF.
This board is now learning why normal boards typically acquiesce aggressively to the CEO, or at least the investors. Clearly they didn't realize the amount of political capital Altman had and while they were well within their rights according to the rules and the charter of the company to do what they did, they're now bearing the full brunt of the backlash from the entire Silicon Valley investment community. You can tell from his twitter feed that Ilya is now running on pure emotion. I'm sure he's been given the "you'll never work in this town again" speech.
https://twitter.com/ilyasut/status/1726590052392956028