Hurray also for the reality check on corporate governance.
- Any Board can do whatever it has the votes for.
- It can dilute anyone's stock, or everyone's.
- It can fire anyone for any reason, and give no reasons.
Boards are largely disciplined not by actual responsibility to stakeholders or shareholders, but by reputational concerns relative to their continuing and future positions - status. In the case of for-profit boards, that does translate directly to upholding shareholder interest, as board members are reliable delegates of a significant investing coalition.
For non-profits, status typically also translates to funding. But when any non-profit has healthy reserves, they are at extreme risk, because the Board is less concerned about its reputation and can become trapped in ideological fashion. That's particularly true for so-called independent board members brought in for their perspectives, and when the potential value of the nonprofit is, well, huge.
This potential for escape from status duty is stronger in our tribalized world, where Board members who welch on larger social concerns or even their own patrons can nonetheless retreat to their (often wealthy) sub-tribe with their dignity intact.
It's ironic that we have so many examples of leadership breakdown as AI comes to the fore. Checks and balances designed to integrate perspectives have fallen prey to game-theoretic strategies in politics and business.
Wouldn't it be nice if we could just built an AI to do the work of boards and Congress, integrating various concerns in a roughly fair and mostly-predictable fashion, so we could stop wasting time on endless leadership contests and their social costs?