One doesn’t have to be overly cynical to think Jensen Huang, the Nvidia boss, starts with one huge advantage as the chipmaker’s board starts its independent investigation into the alleged honeytrap spy scandal. The world of US big tech is not, to put it mildly, strong on checks and balances on a founder’s power. Huang does not enjoy the supercharged voting rights that are par for the course elsewhere – his shareholding is a plain vanilla 3.6%.
On the other hand, Nvidia’s board does not appear to have spent much time worrying about succession planning and “key person risk” or other standard concerns of corporate governance wonks outside the US. There isn’t even a Nvidia board member with the title of chair. Instead, a “lead director” is “designated annually by a majority of the independent directors”, which sounds like a formula for ensuring the attention remains wholly focused on Huang, the sole executive member.
It’s the American way, of course: the cult of the superstar founder or chief executive runs deep and there is a fair argument that such set-ups encourage adventurous risk-taking in pursuit of grand corporate visions. But such governance arrangements look unsuited to situations where the behaviour of the boss is under scrutiny and the role of the board itself is being examined. The investigation will examine whether Huang “has been the target of a foreign intelligence effort” but the independent directors stressed there is now “no reason to believe that either national security or Nvidia secrets were compromised.” OK, but legitimate questions don’t end there.
Did Huang break Nvidia’s internal code of conduct? Did he mislead the board about his relationship with Alice Huang (no relation), the alleged Chinese spy? Was the board aware of US intelligence reports that Ms Huang had been hired by China’s ministry of state security to spy on the Nvidia boss, as reported by the New York Times?
What security precautions were in place? Other boards in other countries might have insisted on suspending the boss until all the facts are in. In the meantime, the defence of Huang from elsewhere has begun.
I think he probably has an excuse for it,” said Donald Trump. Yes, there is little doubt the US tech and political establishment would like this saga to end up in a series of bland conclusions about an everyday infidelity. Nvidia’s board, however, would be wise not to rely on the “irreplaceable” consensus holding, or the political heat going away.
Extract — continue reading at the source.
