I sense that you are referring to a specific past situation that I don’t think it is helpful to attempt to hash out here (although I have no idea what the backstory is). A brief discussion of various constitutencies the board needs to consider can be found at https://corpgov.law.harvard.edu/2012/04/15/nonprofit-corporate-governance-the-boards-role/, but I’m sure someone could do better with more Google searches.
If an organization’s management is dictating to the a board what its job is, or is controlling the onboarding process, I think that organization has a board problem. I don’t tell my supervisor at work how to do his job.
I think my example gives intuition well for why conflict of interest and de jure constraints can be bad. There is no further subtext.
As an aside, because of where we are, and the ideas in your other comments, I want to say, on the subject of lawyers or other ideas about institutions, I do not share anything like Habryka’s aesthetics which you spent a lot of time pushing back on. I am not from California and I did not come through an EA club at some HYPS school. I’m grateful for your discussions on this and other legal matters.
What Jason said about EA orgs adding or changing its board to have 2-3 non-EA board members, especially to an organization with 4 directors, is something you might do to an organization after a major crisis such as misconduct by the management, or a major pivot, maybe after a massive funding change.
To calibrate and give intuition, if we were talking about an employee, not an organization, the magnitude of this change would be like being put on a PIP, being demoted, or moved to another department involuntarily. If you were changing the board this way and done poorly (or sometimes well) many executives or staff would consider leaving.
The issue at hand is changing board, from the close network containing the CEO and often close friends. Yes, independent governance is often nil and the CEO often dominates decisions in the modal (almost all really) start-up as well as most small nonprofits. This happens everywhere, including smaller organizations in EA. I’m 80% sure this was how GiveWell was built.
Nil governance could be bad or good, but the advice being discussed here is far too basic. If there actually was misconduct on the level of FTX fraud, this advice be easily co-opted. For example, Tyler Shultz was the relative of a Theranos board member and extensively explained the outright fraud to his board member relative, and was ignored. SBF could have constructed a performative board to dominate as well.
The level of discussion being given to this on the EA forum is low and risks cargo culting (wasting time working on processes that need true management ability to be effective), or create systemic issues, e.g. “Matthew effects” ( board members become a currency, orgs that can attract them to win the game of funding).
There is unlikely to be unusually high base rate of fraud in current respected EA organizations. Ultimately, the limiting issue in EA is management and talent, and people have worked on this for a long time. Some reactions can be counterproductive.
To clarify, I said that “organizations” should “aim” for “at least one—preferably two or even three—board members who are not ‘full-time’ EAs.” That statement did not refer to RP, and was not intended to suggest that an organization with four directors should immediately jump to adding 2-3 board members in the category I indicated. I also didn’t specify a board size -- “even 3″ makes more sense for a 9+ member board than for a smaller one.
I sense that you are referring to a specific past situation that I don’t think it is helpful to attempt to hash out here (although I have no idea what the backstory is). A brief discussion of various constitutencies the board needs to consider can be found at https://corpgov.law.harvard.edu/2012/04/15/nonprofit-corporate-governance-the-boards-role/, but I’m sure someone could do better with more Google searches.
If an organization’s management is dictating to the a board what its job is, or is controlling the onboarding process, I think that organization has a board problem. I don’t tell my supervisor at work how to do his job.
Hi Jason,
I think my example gives intuition well for why conflict of interest and de jure constraints can be bad. There is no further subtext.
As an aside, because of where we are, and the ideas in your other comments, I want to say, on the subject of lawyers
or other ideas about institutions, I do not share anything like Habryka’s aesthetics which you spent a lot of time pushing back on. I am not from California and I did not come through an EA club at some HYPS school. I’m grateful for your discussions on this and other legal matters.Writing to onlookers:
What Jason said about EA orgs adding or changing its board to have 2-3 non-EA board members, especially to an organization with 4 directors, is something you might do to an organization after a major crisis such as misconduct by the management, or a major pivot, maybe after a massive funding change.
To calibrate and give intuition, if we were talking about an employee, not an organization, the magnitude of this change would be like being put on a PIP, being demoted, or moved to another department involuntarily. If you were changing the board this way and done poorly (or sometimes well) many executives or staff would consider leaving.
The issue at hand is changing board, from the close network containing the CEO and often close friends. Yes, independent governance is often nil and the CEO often dominates decisions in the modal (almost all really) start-up as well as most small nonprofits. This happens everywhere, including smaller organizations in EA. I’m 80% sure this was how GiveWell was built.
Nil governance could be bad or good, but the advice being discussed here is far too basic. If there actually was misconduct on the level of FTX fraud, this advice be easily co-opted. For example, Tyler Shultz was the relative of a Theranos board member and extensively explained the outright fraud to his board member relative, and was ignored. SBF could have constructed a performative board to dominate as well.
The level of discussion being given to this on the EA forum is low and risks cargo culting (wasting time working on processes that need true management ability to be effective), or create systemic issues, e.g. “Matthew effects” ( board members become a currency, orgs that can attract them to win the game of funding).
There is unlikely to be unusually high base rate of fraud in current respected EA organizations. Ultimately, the limiting issue in EA is management and talent, and people have worked on this for a long time. Some reactions can be counterproductive.
To clarify, I said that “organizations” should “aim” for “at least one—preferably two or even three—board members who are not ‘full-time’ EAs.” That statement did not refer to RP, and was not intended to suggest that an organization with four directors should immediately jump to adding 2-3 board members in the category I indicated. I also didn’t specify a board size -- “even 3″ makes more sense for a 9+ member board than for a smaller one.