Joe Grundfest: "The Biggest Governance Trend for 2024 is the Corporation as a Piñata."

Boardroom Governance with Evan Epstein

(0:00) Intro.

(2:21) About this podcast's sponsor: The American College of Governance Counsel.

(3:08) Start of interview.

(3:50) On collapse of SVB & other banks. Lessons for board members. *Reference to video from Stanford Rock Center

(12:00) On the state of private markets and unicorns. Downturn and shutdowns in VC-backed startups. *Per Pitchbook: “Approx 3,200 private VC-backed U.S. companies have gone out of business this year. Combined, those companies raised north of $27B.”

(15:32) On the growth of AI. "The pixie dust."

(18:25) On OpenAI's board fiasco and the company's controversial structure.

"The fundamental problem is with the idea that you can achieve what OpenAI wanted to achieve in terms of guardrails. That's the fundamental point. The second problem is the structure. The structure was all wrong. And the third problem was the people. These were the wrong people to be serving on these boards with the wrong structure, or seeking an objective that can't be obtained." *reference to public choice theory, impossibility theorem by Ken Arrow.

*Reference to innovations in corporate governance structures of AI companies (OpenAI, Anthropic, xAI).

(26:07) On geopolitics of AI: China not bound by same guardrails.

(28:56) On the crypto industry and its regulatory challenges. The case of Ripple vs SEC.

(33:11) Fraud in private markets (ie Elizabeth Holmes, SBF, Trevor Milton and other high profile convictions).

(34:18) ESG/DEI backlash and the politicization of corporation governance. "This is situation where less is more."

(38:27) Biggest winner in business in 2023.

(40:32) Biggest loser in business in 2023.

(42:46) Biggest business surprise of 2023.

(45:43) Best and worst corporate governance trend from 2023.

(47:24) The biggest corporate governance trend to watch out for in 2024.

Joseph A. Grundfest is the William A. Franke Professor of Law and Business Emeritus at Stanford Law School and Senior Faculty of the Rock Center for Corporate Governance. He is a former Commissioner of the SEC and co-founded Financial Engines with Professor William F. Sharpe, the 1990 Nobel Prize winner in Economics. He formerly served as a director of KKR and Oracle.

You can follow Evan on social media at:

X: @evanepstein

LinkedIn: https://www.linkedin.com/in/epsteinevan/

Substack: https://evanepstein.substack.com/

__

To support this podcast you can join as a subscriber of the Boardroom Governance Newsletter at https://evanepstein.substack.com/

__

Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License