EPISODE · Feb 17, 2025 · 55 MIN
Rick Alexander: On the Rise of PBCs in the AI Industry and Firm-Specific vs. Diversified Investor Duties
from Boardroom Governance with Evan Epstein · host Evan Epstein, Rick Alexander
(0:00) Intro.(1:33) About the podcast sponsor: The American College of Governance Counsel(2:20) Start of interview. *Reference to prior episode with Rick (E14 from Aug 2020)(3:32) Update on Public Benefit Corporations (PBCs) from prior episode (2020)(6:00) Surge of VC investments in PBCs driven by AI startups. *Reference to E159 with David Berger on Anthropic's structure(9:48) The OpenAI Controversy (conversion from non-profit to PBC)(13:25) On Dual-Class Share Structures in tech companies(17:10) On Danone and BP as examples of shareholder activism from hedge funds.(18:57) On "Stay private vs Go Public" debate. *Reference to E157 with Tom Callahan, CEO of Nasdaq Private Market(27:17) On the current ESG/DEI backlash ("I think it's an anti-shareholder backlash")(30:52) On the current backlash against Delaware as the favored corporate home(35:26) The McRitchie v. Zuckerberg Case (firm-specific vs diversified equity investors' fiduciary duties)(46:54) On the concentration of power by institutional investors *Reference to E118 with John Coates, from Harvard Law School. Reference to Freshfield's report A Legal Framework for Impact (2021) (52:03) Looking Forward: US boards under the EU Directive on Corporate Sustainability Due Diligence.Rick Alexander is the CEO of Shareholder Commons. He is also a leading expert in public benefit corporations. You can follow Evan on social media at:Website: boardroom-governance.comX: @evanepsteinLinkedIn: https://www.linkedin.com/in/epsteinevan/ Substack: https://evanepstein.substack.com/YouTube: https://www.youtube.com/@BoardroomGovernance__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
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What this episode covers
Rick Alexander is the CEO of Shareholder Commons, an independent, non-profit organization that addresses social and environmental issues from the perspective of shareholders who diversify their investments to optimize risk and return. He is also a leading expert in public benefit corporations. In this conversation, we explore the rise of PBCs and their growing role in new AI companies, particularly as venture capital pours into AI. We discuss OpenAI’s transition to a PBC, the implications of super majority voting structures, and the ongoing debate between staying private or going public. We also dive into the backlash against ESG initiatives, Delaware’s evolving corporate landscape, and the McRitchie vs. Zuckerberg case, which raises important questions about directors’ fiduciary duties. Throughout, we examine the balance between shareholder profit and broader societal impact, a crucial theme in today’s governance landscape. If you enjoy this episode, please subscribe, leave a review, or share it on social media. And don’t forget to stay updated by subscribing to the Boardroom Governance Newsletter at evanepstein.substack.com. This podcast is sponsored by the American College of Governance Counsel.
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Rick Alexander: On the Rise of PBCs in the AI Industry and Firm-Specific vs. Diversified Investor Duties
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