In late November 2023, OpenAI's new board of directors took stock of the situation. The company, which sought to develop artificial general intelligence (AGI)-computer systems with capabilities exceeding human abilities-was looking to regain its footing after a chaotic leadership and governance crisis that played out a week earlier. The previous board had stunned observers by firing CEO Sam Altman and removing him from the board for unspecified reasons. Days later, Altman was back as CEO, directors resigned, and a new three-person board formed with Bret Taylor, Larry Summers, and Adam D'Angelo, the only continuing director. The new board of directors faced an urgent set of issues-around OpenAI's governance, how to build out the board, AI ethics and safety, and their relationship with a CEO one of them had helped fire. Their quandary was complicated by OpenAI's unique mission to create AGI to benefit all of humanity and by its unusual structure as a non-profit controlling a for-profit entity. The AI it sought to develop had the potential to be world-changing-for better, or for worse-and the world was watching closely as the board sought a path forward.

In late November 2023, OpenAI's new board of directors took stock of the situation. The company, which sought to develop artificial general intelligence (AGI)-computer systems with capabilities exceeding human abilities-was looking to regain its footing after a chaotic leadership and governance crisis that played out a week earlier. The previous board had stunned observers by firing CEO Sam Altman and removing him from the board for unspecified reasons. Days later, Altman was back as CEO, directors resigned, and a new three-person board formed with Bret Taylor, Larry Summers, and Adam D'Angelo, the only continuing director. The new directors faced an urgent set of issues-around OpenAI's governance, how to build out the board, AI ethics and safety, and their relationship with a CEO one of them had helped fire. Their quandary was complicated by OpenAI's unique mission to create AGI to benefit all of humanity and by its unusual structure as a non-profit controlling a for-profit entity. The AI it sought to develop had the potential to be world-changing-for better, or for worse-and the world was watching closely as the board sought a path forward.

In October 2019, the McDonald's Corporation board of directors, chaired by Enrique Hernandez, Jr., gathered to learn the results of their outside counsel's investigation into the conduct of the CEO. On the surface, the iconic fast-food chain was thriving as growing profits translated into share price gains. But unbeknownst to the public, a drama was unfolding that threatened the company's success and brand value. Hernandez and other directors listened intently as counsel explained their findings that the CEO had engaged in an inappropriate consensual relationship with an employee, in violation of the company's code of conduct. As directors grappled with the situation, they faced a litany of difficult questions. What action should they take with a CEO some were calling McDonald's "savior," credited with revitalizing the business and doubling its share price in under five years? Should they sanction him or possibly even remove him from office? And, if they did remove him, should he receive his potentially substantial severance package? How might shareholders, employees, and customers react-and to what extent should the directors consider stakeholder reactions in their deliberations?

Supplements "Peloton Interactive (A)" (HBS No. 323-005), describing company restructuring and changes to management and the board of directors between February 8 and early October 2022.

Early in February 2022, the board of Peloton Interactive faced some knotty challenges. Immense pandemic demand for its stationary exercise bicycles and treadmills had prompted the firm to scale up production rapidly. But as gyms reopened and the virulence of the virus ebbed, demand had ebbed too, leaving Peloton with unsold inventory, an unsustainable cost structure, and Nasdaq's worst-performing stock for 2021. Activist shareholders were calling on the board to remove the founder CEO, who was board chair and a controlling shareholder through a dual-class share structure, and sell the company to a strategic investor. Complicating external pressure for change was a dual-class share structure that gave insiders a high degree of control over governance.

This background note discusses the evolution, use, and prevalence of staggered boards. By comparison with unitary boards whose members are all elected annually for one-year terms, staggered boards are divided into subsets of directors, with one subset up for election each year, typically for three year terms. While 61% of the S&P 500 had staggered boards in 2002, the practice largely fell out of favor in ensuing decades, and only 12% had one in 2022. This note discusses what staggered boards are and how they evolved; arguments for and against them from critics and proponents; developments leading to their decline; the academic research on their potential effects broadly and on certain types of firms; and the legal approaches to staggered boards in the United States as well as the diverse approaches to staggered boards internationally.

In the spring of 2021, the board of directors of Kimball International, Inc. (KII) was considering changes to the company's executive compensation plan. Two years earlier, the board had appointed Kristie Juster as the new CEO of KII, a publicly traded, small cap maker of commercial office furniture based in Jasper, Indiana. Juster had set in motion a major organizational transformation aimed at putting KII on a higher-growth trajectory. Under her leadership, the company had examined its purpose, adopted a new strategy, revised its compensation plan, and undergone a major restructuring. And then, COVID-19 hit. The company adapted quickly, but the pandemic had a significant impact on KII's profitability and stock price, and on executive pay which was significantly tied to both. As the pandemic dragged on, the board had to decide how to design an executive compensation plan that would be fair to employees, fair to shareholders, and meaningful to executives in a highly competitive labor market, while also aligning with KII's purpose and strategy, and driving its ongoing transformation.

Kimball International, Inc. (KII), led by CEO Kristie Juster, and its board of directors, chaired by Kim Ryan, faced critical questions about KII's future in the spring of 2021. Two years earlier, the board had appointed Juster as the new CEO of KII, a publicly traded, small cap maker of commercial office furniture based in Jasper, Indiana. Juster had set in motion a major organizational transformation aimed at putting KII on a higher-growth trajectory. Under her leadership, the company had examined its purpose, adopted a new strategy, revised its compensation plan, and undergone a major restructuring. And then, COVID-19 hit. The company adapted quickly, but the pandemic had a significant impact on KII's profitability and stock price, and on executive pay which was significantly tied to both. As the pandemic dragged on, the board had to decide how to design an executive compensation plan that would be fair to employees, fair to shareholders, and meaningful to executives in a highly competitive labor market, while also aligning with KII's purpose and strategy, and driving its ongoing transformation.

The case describes how Odebrecht's board of directors handled the issues raised in the (A) case and continues the story of the Group's efforts to restore its reputation and return to growth after admitting its role in Latin America's largest-ever corruption scandal. The case covers the Group's filing for, and emergence from, a court-supervised reorganization while coping with an ongoing feud within its founding family, as well as changes in the Group's leadership and governance as it attempts to regain financial stability and complete another round of changes to its compliance and internal control systems. The case concludes with the outgoing CEO's announcement of the Group's new name-Novonor-and its newly defined purpose and vision for its future.

Aptiv's board must decide whether a joint venture with an auto maker is the right next step in the company's efforts to develop and commercialize a production-ready autonomous driving system. While many commentators believed that Aptiv's self-driving technologies had the potential to revolutionize vehicle use and generate enormous financial returns, the company was in a high-profile and increasingly capital intensive race among some of the world's technology giants to achieve that goal - and much more investment would be needed. As the management team began exploring the possibility of working with a partner to share the costs and accelerate their research and development activities, they turned to the board for strategic guidance. The case describes the role of the board and its Innovation and Technology Committee (ITC) in the company's transformation from a traditional auto parts supplier to a high-technology firm focused on the future of mobility and lays out the factors directors are weighing as they consider the possibility of forming a major joint venture with a vehicle manufacturer.

Aptiv's board must decide whether a joint venture with an auto maker is the right next step in the company's efforts to develop and commercialize a production-ready autonomous driving system. While many commentators believed that Aptiv's self-driving technologies had the potential to revolutionize vehicle use and generate enormous financial returns, the company was in a high-profile and increasingly capital intensive race among some of the world's technology giants to achieve that goal - and much more investment would be needed. As the management team began exploring the possibility of working with a partner to share the costs and accelerate their research and development activities, they turned to the board for strategic guidance. The case describes the role of the board and its Innovation and Technology Committee (ITC) in the company's transformation from a traditional auto parts supplier to a high-technology firm focused on the future of mobility and lays out the factors directors are weighing as they consider the possibility of forming a major joint venture with a vehicle manufacturer.

This is the second part of a two-part note. The first part (A) explores how US private equity firms are incorporating ESG (Environmental, Social, & Governance) factors and impact objectives into their investment strategies and firm practices. It is based on publicly available information and on interviews with representatives from leading firms, limited partners (LPs), academic experts, and relevant nonprofit organizations. The note begins with background on the PE industry. It then examines why and how firms are incorporating ESG and impact objectives, identifies the barriers to integrating these objectives more fully, and summarizes some areas of possible improvement. The second part (B) offers suggestions for roles various constituents can play in advocating for improved ESG and impact efforts in the PE industry.

This Note has two parts. The first part (A) explores how US private equity firms are incorporating ESG (Environmental, Social, & Governance) factors and impact objectives into their investment strategies and firm practices. It is based on publicly available information and on interviews with representatives from leading firms, limited partners (LPs), academic experts, and relevant nonprofit organizations. The note begins with background on the PE industry. It then examines why and how firms are incorporating ESG and impact objectives, identifies the barriers to integrating these objectives more fully, and summarizes some areas of possible improvement. The second part (B) offers suggestions for offers suggestions for roles various constituents can play in advocating for improved ESG and impact efforts in the PE industry.

At the center of one of the largest corruption scandals in Latin America, Brazilian conglomerate Odebrecht signed a leniency agreement with American, Swiss and Brazilian prosecutors in 2016 admitting to paying bribes in 12 countries. In an effort to regain financial stability and restore its damaged reputation, the Group overhauled its governance and set in motion a major organizational transformation effort. The case describes the Group's transformation journey and details various dilemmas that the new board of directors faced as the Group sought to put the scandal behind it and forge a path to the future.

The five commissioners of the California Public Utilities Commission (CPUC) listened intently at a public forum in April 2019 as PG&E Corporation's out-going chairman Richard Kelly described the company's proposed new board. PG&E, which provided electricity and natural gas to millions of Californians, had once been recognized for its vision in foreseeing energy's potential to reshape the state and power its economy. But PG&E was now in the crosshairs of investors, regulators, and the public for something else entirely: its role in a series of deadly and destructive wildfires that had ravaged the region and precipitated PG&E's bankruptcy months earlier. Called "the first climate-change bankruptcy," it was the largest utility bankruptcy in U.S. history. The commissioners at the CPUC, PG&E's primary regulator, were particularly concerned about PG&E's governance and had convened the forum to solicit opinions from experts and the public and to hear for themselves what steps the company was taking to improve it. The Commissioners are considering whether to make specific recommendations regarding the board's composition and functioning, including how the board assesses and compensates PG&E's CEO. A principal issue is the use of non-financial metrics to evaluate and reward CEO performance.

The case concerns the sale of Mae Terra, one of Brazil's leading brands for packaged organic foods, to the consumer goods giant Unilever in 2017. Working with Unilever management, Mae Terra's CEO Alexandre Borges must determine whether and how to keep Mae Terra's B Certification, which attests to its commitment to having a positive social and environmental impact, and what internal governance mechanisms will enable MaeTerra to maintain its mission, values, and practices even as it is integrated into a large volume-driven multinational whose governance follows standard listed company principles.

Unilever is making strides to integrate the operations of Mae Terra-one of Brazil's leading brands for packaged organic foods-into its own structures, after acquiring the company in 2017. Mae Terra's CEO, Alexandre Borges, must decide whether to implement his original plan as written into the purchase and sales agreement to create an advisory board to help ensure that the company maintain its mission, values and practices as part of a volume-driven multinational like Unilever- and, if so, how the board will operate and who its members will be. Some executives believe that such a board is not necessary given Unilever's own culture and commitments.