Post by Alfonso Gambardella

The OpenAI board's clash with its CEO wasn't really about money. It was about two incompatible theories of what the company was for. That kind of misalignment is the subject of our new paper with Arnaldo Camuffo, Miguel Espinoza, and Andrea Pignataro. When boards and CEOs are implementing a genuinely new vision of the firm, we argue that incentives matter far less than whether they agree on the theory of what the firm will face and what it must do. When they don't, the model shows the gap reshapes compensation, turns strategic narratives into costly signals, and makes early firing far more likely. It also produces a counterintuitive result that we call Reverse Membership Premium — a CEO accepting lower fixed (vs. future) pay to signal conviction in the firm's theory of the future. Alongside OpenAI, we trace successions at GE, Toyota, and Mastercard. "CEO Succession Under Anticipatory Awareness Misalignment," with Arnaldo Camuffo, Miguel Espinoza, and Andrea Pignataro — forthcoming and open access in Organization Science: https://lnkd.in/d6_exzfh