If there is one story dominating the news this past weekend, it is that the board of OpenAI fired CEO Sam Altman. Microsoft, where I work, is a majority investor in OpenAI. While I have nothing to do with that, it is probably best not to weigh in since I enjoy gainful employment at the company.
Instead of writing about the OpenAI drama from this past weekend, I thought I’d take a crack at writing about the ESG issues around it. Here are three short ESG considerations playing through my mind as I listen to the news.
Responsible AI is critical
OpenAI’s mission “is to ensure that artificial general intelligence benefits all of humanity.” This is a noteworthy goal as AI has fantastic growth potential, but the scale can augment existing social bias and cause harm. For example, a recent lawsuit claims that a UnitedHealthcare algorithm consistently denies elderly patients the care they need. This algorithm doesn’t even appear to use the more powerful Generative AI models that OpenAI works on!
When rolling out any quantitative or qualitative AI, governance around the model needs to be implemented. This is how understanding ESG, materiality, and stakeholders can help. By approaching your data and model development with these concepts, an IT team and business unit can work together to build a model that captures the opportunity responsibly.
Responsible AI intersects across the pillars of ESG, from sustainably training AI models and solving planetary issues to avoiding social bias and democratizing access to services to the governance principles that surround it. Avoid controversy by taking a look at AI through the lens of ESG.
Here are some resources to explore:
Microsoft Responsible AI Standard v2 General Requirements
Montreal AI Ethics Institute | Democratizing AI ethics literacy.
It’s been a tough year for CEOs
Sam Altman isn’t the only CEO feeling pain this calendar year. CEO Pay has been weaponized by workers seeking a living wage against inflationary pressures. I can already hear the collective subscriber groans, but stay with me because these are trends worth considering.
While CEO Pay has grabbed headlines, you might have missed (because I missed it, too) that CEO turnover appears at an all-time high in 2023. Per a Challenger, Gray & Christmas, Inc. study, from January to September, 1,425 CEOs have left their post with no reason given. On a personal note, I have talked to some leaders who have left due to stress related to managing COVID-19, in that they just needed a break.
Still, one interesting note is that OpenAI had a female CEO in its CTO, Mira Murati, for a flash. Yet even this CEO move gets questioned when so many women find themselves in the CEO position only to defend what the outgoing male CEO did and try to shepherd the company toward stability. If you aren’t familiar with this theory, it is known as the glass cliff. In Murati’s case, this is an unfortunate association as Altman appears not to have left behind controversy in his wake to clean up, yet that doubt of why she was selected did play in some people’s minds.
Governance must be a focus, as should ESG
Days later, it still isn’t clear why the board acted as it did, but one thing is clear. Per an interview on CNBC last night, my company’s CEO, Satya Nadella, stated that “governance needs to change.”
The biggest lesson from this weekend appears to be what I wrote earlier this year. Nothing gets past Corporate Governance.
While many decry ESG, there is value to be gained in executing the pillars consistently. One should not need to explain to a board how governance works or how the principles that govern a company can affect risk. Yet, time and again, we see leaders making very questionable decisions that lead to detrimental outcomes.
Governance isn’t just the last pillar of ESG or something ‘boards should already be doing.’ It is an active engagement and careful consideration of how the company executes the business and its purpose. In a world of interconnected risks and opportunities, the keywords here are active and careful.
Look, no group of people will always get it right, but with quality governance, a board should at least get close and execute consistently enough to avoid major pitfalls.