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> Last night, Sam got a text from Ilya asking to talk at noon Friday. Sam joined a Google Meet and the whole board, except Greg, was there. Ilya told Sam he was

> Last night, Sam got a text from Ilya asking to talk at noon Friday. Sam joined a Google Meet and the whole board, except Greg, was there. Ilya told Sam he was being fired and that the news was going out very soon. I'm very surprised to read that the chairman of the board did not know of the decision until the last moment. It looks like after the other directors had made the decision without including the chairman in collective discussion. Isn't it a breach of directors legal duties to hold an effective board meeting without inviting (with adequate notice) all members of the board, such as it's chairman Greg, to ensure collective responsibility for its deliberations and decisions? E.g. from https://www.delawareinc.com/blog/calling-and-holding-board-meetings-part1/ https://www.delawareinc.com/blog/calling-and-holding-board-m... >> Properly Called / Formalities Satisfied: A corporation’s bylaws ordinarily provide who can call a corporate board meeting, the notice directors must receive (which the directors can waive), the way notice of a meeting must be given (email and/or mail), the required contents of the notice, and any provisions addressing the location of meetings (permitted distance from principal offices). Compliance with these procedural requirements is important -- board action taken at an improperly held meeting can be deemed invalid and ineffective

true_religion 3y ago
They dropped the chairman of the board before or shortly aftet this decision.
matwood 3y ago
Your quote answers your own question: > A corporation’s bylaws ordinarily provide You would need to read the bylaws to determine if the meeting was proper or not.
- jlokier 3y ago
  Perhaps. The bylaws provide details such as who can call a meeting, how to perform written votes without a meeting, etc. but not the fact that the board of directors have legal protection as a collectively responsibility group, shielded from individual liability for their decisions, only if they act as a board rather than doing their own thing. An improperly conducted meeting which excluded some board members on such a substantial decision could open OpenAI, or even the individual directors who took the decision, to losing a lawsuit from parties injured by the decision, such as Microsoft, Altman, Brockman and others. A lawsuit seems unlikely, but its possibility creates pressures on OpenAI that wouldn't be present if the decisions were taken in a more "above board" manner (see what I did there). For example, hypothetically if there were enforcable non-disclosure and/or non-compete contracts between OpenAI and Altman that would prevent Microsoft hiring him straight away to directly work on a copy of OpenAI's technology, the poorly conducted board decision would boost Microsoft and Altman's confidence to ignore those contracts, knowing they could counter-sue at any time. Another example, it could empower Microsoft to force OpenAI to increase Microsoft's share in the for-profit subsidiary above 50%, effectively transferring full control of OpenAI's technical assets including data to Microsoft.
Cyberfit 3y ago
Yeah, the handling is very suspect and definitely not kosher. However, I would be very surprised if the board directors would make a legal mistake like that, especially given their professional tenure. Likely, they’ve discussed and cleared this with world-class legal advisors beforehand as well. So I reckon something in the Articles of Association or the Shareholders’ Agreement of OpenAI specifically allows this.

true_religion 3y ago

They dropped the chairman of the board before or shortly aftet this decision.

matwood 3y ago

Your quote answers your own question: > A corporation’s bylaws ordinarily provide You would need to read the bylaws to determine if the meeting was proper or not.

jlokier 3y ago
Perhaps. The bylaws provide details such as who can call a meeting, how to perform written votes without a meeting, etc. but not the fact that the board of directors have legal protection as a collectively responsibility group, shielded from individual liability for their decisions, only if they act as a board rather than doing their own thing. An improperly conducted meeting which excluded some board members on such a substantial decision could open OpenAI, or even the individual directors who took the decision, to losing a lawsuit from parties injured by the decision, such as Microsoft, Altman, Brockman and others. A lawsuit seems unlikely, but its possibility creates pressures on OpenAI that wouldn't be present if the decisions were taken in a more "above board" manner (see what I did there). For example, hypothetically if there were enforcable non-disclosure and/or non-compete contracts between OpenAI and Altman that would prevent Microsoft hiring him straight away to directly work on a copy of OpenAI's technology, the poorly conducted board decision would boost Microsoft and Altman's confidence to ignore those contracts, knowing they could counter-sue at any time. Another example, it could empower Microsoft to force OpenAI to increase Microsoft's share in the for-profit subsidiary above 50%, effectively transferring full control of OpenAI's technical assets including data to Microsoft.

Cyberfit 3y ago

Yeah, the handling is very suspect and definitely not kosher. However, I would be very surprised if the board directors would make a legal mistake like that, especially given their professional tenure. Likely, they’ve discussed and cleared this with world-class legal advisors beforehand as well. So I reckon something in the Articles of Association or the Shareholders’ Agreement of OpenAI specifically allows this.