Governance and Control
Anthropic was founded in 2021 to ensure humanity can control AI and benefit from it in the long-term. As the frontier lab approaches its initial public offering, however, there’s one class of humanity that is being shut out of control: anyone who buys its stock on public markets.
Complex structures that allow founders to control their public companies without owning most of them are nothing new in Silicon Valley. But Anthropic’s obsession with AI safety has resulted in a baroque style of corporate governance that will leave common shareholders with little say over most major decisions at the AI company, including who sits on its board.
First, Anthropic is a public benefit company—a for-profit corporation legally allowed to weigh a public mission alongside profit—with the goal of promoting AI safety. That status protects the board’s ability to make decisions about AI safety that aren’t driven entirely by shareholder value without being sued by angry investors.
Right now, the board is chaired by Anthropic president Daniela Amodei and includes CEO Dario Amodei, Netflix cofounder Reed Hastings, former Microsoft and GM CFO Christopher Liddell, Novartis CEO Vas Narasimhan, and Spark Capital partner Yasmin Razavi.
The Role of the Long-Term Benefit Trust
Second, Anthropic has allocated significant control of its board to a Long-Term Benefit Trust (LTBT), an independent panel meant to keep the company focused on its mission. The trust owns a class of stock that gives it the ability to elect and remove a majority of the company’s board, known as Class T directors. The LTBT includes former Federal Reserve chair Ben Bernanke, national security expert Richard Fontaine, and Harvard physicist Christopher Stubbs.
Third, Anthropic’s seven founders also jointly own a special class of stock that gives a majority of them 50.1% of shareholder voting power, allowing them to elect three members of the board of directors. If there is no majority among the founders, their shares are voted in proportion with holders of common stock.
Checks and Balances
Finally, the board can put a check on the LTBT. When the LTBT nominates or removes a “Specified” director without cause, the board’s nominating committee can decline to approve the move and throw the decision to the company’s employees for a vote.
Here’s what all that looks like:
Image Credits:Tim Fernholz/TechCrunch
Employee Influence and Future Outlook
The dynamics of such a complex structure are hard to predict. Anthropic’s structure seems to formalize a level of employee power, similar to the dynamics seen during leadership transitions at other AI firms. Employees can potentially overrule the LTBT on board seats if they back the board over the trust members.
At Anthropic, cracks in the founders’ unified front could lead to common shareholders having more say than expected.
The founders’ control won’t last forever: Ten years after the IPO, the founders can choose to end their control of the company, or their control will end automatically when fewer than three of them remain. At that point, the LTBT will continue until 85% of common shareholders vote to end it, or it decides to step down with approval from the board.
If and when neither special class of shareholder exists any more, common shareholders finally get control.
