The conversation around the recent developments at OpenAI refer to a major governance “innovation” intended to steer its long-term impact. This innovation is structuring a for-profit entity within a non-profit one. This was complicated by employees having equity in the for-profit but the CEO and the directors don’t. Investors in the for-profit had a cap on the return they could receive, nor did they have control rights, which remained with the nonprofit board. But such contradictions are not alien to our markets. The Tata group has managed these and even grown, since it adopted this structure over a century ago.
What lessons does the Tata group structure hold for OpenAI? Read the guest blog by R Venkataramanan here.
Dr R Venkataramanan is the founder and CEO of Karkinos Healthcare and an Advisor to the Chairman, Reliance Industries Limited. Prior to founding Karkinos, Venkat spent more than 15 years with the Tata Group including as the Managing Trustee of the Tata Trusts.