Why the Nvidia CEO’s departure is about governance failures and not sex

Detailed summary

Colette Kress has been Nvidia's CFO since 2013. She is now interim CEO with earnings due on 17 November. She is no outsider.

Jensen Huang resigned as Nvidia’s CEO on 11 November, days after he admitted an affair with a woman US intelligence is said to suspect is a spy. Reporting since then says there was more.

The New York Times reported a relationship with one of his direct reports. Reuters reported an intimate relationship with a second employee. Nvidia has not confirmed either report, and the board has not published its investigation’s findings.

Nvidia is the world’s second most valuable company. It lost hundreds of billions of dollars in market value in days. That should tell you how much of the global economy is a house of cards.

Whether his marriage is open is not our business, and it changes nothing. The issue is an alleged conflict of interest that nobody stopped. That is a governance failure, and it is exactly what DEI, compliance and ethics teams have spent decades trying to prevent.

Research links narcissistic CEOs to bold, volatile strategy and, in a separate study, to fraud. I say this as a founder, and as an executive who has worked for and with many brilliant ones. The trait that produces a huge vision and a taste for risk also removes the brakes.

By continuing, you agree to our Terms & Conditions and Privacy Policy.

Add the incentives of venture capital and public markets. In my experience, boards often reward growth first and human impact last.

Here is what Nvidia looked like, according to Fortune: about 60 direct reports to one CEO, no COO, no chief compliance officer, and no clearly outlined succession plan, in one governance professor’s words. It had no Chair until 11 November. The first, Harvey Jones, is 73 and has been on the board since 1993.

Something like this was always going to happen. It’s deeply unfortunate that it happened to a cornerstone of the global economy, but many of us saw something like this coming.

Opening of the article, excerpted from Startup Daily. To read the rest, open the article on the publisher's site.