One interesting implication of the OpenAI restructuring is the potential for safety-focused litigation brought by motivated shareholders holding at least 2% of OpenAI’s outstanding equity. If you currently hold OpenAI equity, it’s worth keeping this in mind.
The boards of directors of most Delaware public benefit corporations (PBCs) have fiduciary duties that require the directors to balance the PBC’s public benefit mission against the financial interests of shareholders and the interests of other stakeholders. This balancing dynamic makes it difficult for shareholders to sue PBC boards for failing to sufficiently prioritize the PBC’s public benefit mission. In fact, there are, famously (among folks who follow such things), no reported cases at all of shareholders successfully suing PBC directors for failing to do enough to further its public benefit mission. This sets PBCs apart from traditional for-profit enterprises, where there are many reported cases where shareholders successfully sued boards of companies for failing to adequately maximize shareholder value.
Because the attorneys general of Delaware and California demanded it, however, the certificate of incorporation of the new OpenAI PBC is different from other PBCs: it requires the board of directors to consider exclusively the PBC’s mission when making decisions related to safety and security, without balancing the mission against shareholder or other stakeholder interests. This makes a shareholder derivative suit (a lawsuit by shareholders technically on behalf of the corporation itself) against the board of the OpenAI PBC for failing to prioritize its mission in matters of safety and security much more likely to succeed than it would under the normal PBC balancing regime.
It’s worth noting the standing requirement for shareholder suits against PBC boards, as it creates an additional hurdle not present in lawsuits against the boards of traditional for-profit organizations. Unless/until OpenAI goes public, a shareholder lawsuit against the PBC would require a coalition of shareholders holding at least 2% of the PBC’s outstanding shares. If such a 2% coalition could be mobilized, however, it could become a powerful force alongside the attorneys general in overseeing the new OpenAI PBC and ensuring that, where issues of safety and security are involved, the PBC’s board acts strictly in accordance with the mission of ensuring AGI is safe and benefits all of humanity. (If OpenAI were to go public, this 2% threshold would shift to just $2mm in holdings at the then-current market value, and meeting the threshold presumably becomes much easier.)