Private equity investor (E2G)
Co-Treasurer @ EA UK
Trustee @ EA for Christians
Trustee @ ICM UK
Director @ EA Good Governance Project
MBA @ INSEAD
Grayden
Karma: 1,307
Bad Actors are not the Main Issue in EA Governance
Introducing the EA Good Governance Project
Did the EV US Board consider running an open recruitment process and inviting applications from people outside of their immediate circle? If so, why did it decide against?
Update from the EA Good Governance Project
I don’t work in ops or within an EA org, but my observation from the outside is that the way EA does ops is very weird. Note these are my impressions from the outside so may not be reflective of the truth:
The term “Operations” is not used in the same way outside EA. In EA, it normally seems to mean “everything back office that the CEO doesn’t care about as long as it’s done. Outside of EA, it normally means the main function of the organisation (the COO normally has the highest number of people reporting to them after the CEO)
EA takes highly talented people and gives them menial roles because value-alignment is more important than experience and cost-effectiveness
People in EA have a lower tolerance for admin, possibly because they elevate themselves to a high level of importance. I‘ve worked with very senior and very busy company executives in the normal world and they reply to my emails. Yet in EA, it feels like once you have 2 years of experience in EA, you are too important to read your own emails and need somebody with 1 year of experience to do it for you
EA has so many small organizations and there seems to be so much reinventing the wheel, yet when it comes to specialists there are none
Managers within EA don’t seem to realise that some things they call operations are actually management responsibilities, and that to be a manager you need to be willing to less or maybe none of the day job, e.g. the CEO of a large research organisation should probably not do research anymore
At EA for Christians, we often interact with people who are altruistic and focused on impact but do not want to associate with EA because of its perceived anti-religion ethos.
On the flip side, since becoming involved with EA for Christians, a number of people have told me they are Christian but keep it quiet for fear it will damage their career prospects.
Keynesian Altruism
The Role of a Non-Profit Board
FTX: Let’s not throw stones
In the UK, non-profits can be either member-based or not. I believe EVF is not member-based. That means the board is accountable to itself. Only the board can appoint and remove Trustees.
This is one of the reasons why term limits are considered good practice. Based on the tenure of some EVF Trustees, it looks like term limits have not been implemented.
I appreciate the conciseness of this post. It’s an under-appreciated skill on the EA Forum.
Nice post. I really liked your point around having a nuanced view. I remember various conversations over the years on broad vs. deep, as if it’s that simple. The reality is that the broader you go, the more likely you are to find the deep people.
Thank you for writing this and for all the work you (and others) have put in over the years.
My question is to what extent you think CE’s impact measurement is tautological. If you determine something to be a high impact opportunity and then go and do it, aren’t you by definition doing things you estimate to be high impact (as long as you don’t screw up the execution or realise you made an error). To full adjust for selection effect, you would have to ignore all research conducted before the decision was made and rely solely on new data, which is probably quite hard to come by.
The 40% seems very high. For-profit start-ups have a much higher failure rate. If that’s true, that’s incredible, but I’d expect to see more like 5% of charities and 50% of funds.
@Jack Lewars is spot on. If you don’t believe him, take a look at the list of ~70 individuals on the EA Good Governance Project’s trustee directory. In order to effectively govern you need competence and no collective blindspots, not just value alignment.
Luke, I completely agree. In fact, I’m trying to do something about it.
My credentials: I am an investor by profession and have experience negotiating governance structures. I have been a director of 3 private companies and a trustee of 4 non-profits.
Governance is often not ideal. That’s because it is a weird confluence of fitting within the law (often modern laws layered over common laws that don’t make much sense today), relationships and negotiation. For example, you pose the question about whether unusual governance structures have been tried by companies. In general, they haven’t because they aren’t legally possible.
In terms of structuring like a democracy, I don’t think democracies deal well with technical and minor issues. I say “minor” issue because if everything is going well, people will probably not consider it important. It’s also impossible for future people to participate in today’s democracy by definition.
The final point I’d make is that time horizons are important here. Many organisations struggle to manage both the immediate term and the long-term in the same framework. Within a corporate, it is good organisational practice to divide those responsibilities to a certain extent.
On social choice theory, I think it’s important to distinguish between decisions that have to be made (typically handled by the executive, e.g. there needs to be a new Chair of the Federal Reserve) and decisions about changes (typically handled by the legislature, e.g. we could improve the law on bank regulation). Budgets typically require approval of the legislature, but are really something that has to happen (the status quo of the government having no money used to be a reasonable option but is not in the modern day).
Some minor comments on the piece:
I know you’ve tried to simplify things, but governance of for-profit corporations is a lot more complex than you make out. Board members are not as accountable to shareholders as you would expect, e.g. AGM votes often being non-binding, adoption of poison pills. There are also normally minority protections, e.g. takeover rules for public companies, investor vetoes in private companies. CEOs typically serve on the Board (which is different to non-profits), are sometimes also the Chair and can be the controlling shareholder, which adds a lot of additional dynamics. I think it’s also very important to consider not just the legal governance but the practical governance, e.g. the Chairman has significantly more influence than other board members even though they all have 1 vote each. Soft power is very important.
With non-profits, I have observed a significant difference between UK and US boards. UK boards are typically filled based on expertise, whereas many US board are filled with donors and fundraisers. This is not a legal difference, but does affect the dynamic a lot.
Non-profits can also have members that act a bit like shareholders. This is most common for membership organisations, e.g. sports clubs, mutual interest societies, but it’s also possible for non-profits to have another organisation as its sole member, i.e. a bit like a subsidiary.
Saying they have been recused since November implies that they weren’t recused from decision-making regarding FTX prior to November. If this is true (and I’m hesitant because I don’t know all the facts), they were likely not following proper process prior to November.
The Parable of the Good Samaritan seems to lean towards impartiality. Although the injured man was laying in front of the Samaritan (geographic proximity), the Samaritan was considered a foreigner / enemy (no proximity of relationship).
My read of the article is that it is alleging incompetence and/or lack of regard for laws rather than alleging wrongdoing. I’m a trustee of a number of UK charities myself and the Charity Commission sends all trustees basic information on manging conflicts of interest and data protection. They are by no means “obscure and arbitrary” and I think we as a community need to be extra careful to comply with the letter and spirit of every law given the recent FTX events.
I think forecasting is attractive to many people in EA like myself because EA skews towards curious people from STEM backgrounds who like games. However, I’m yet to see a robust case for it being an effective use of charitable funds (if there is, please point me to it). I’m worried we are not being objective enough and trying to find the facts that support the conclusion rather than the other way round.