The Long Term Benefit Trust

The Long-Term Benefit Trust \ Anthropic Announcements The Long-Term Benefit Trust Sep 19, 2023

Today we are sharing more details about our new governance structure called the Long-Term Benefit Trust (LTBT) , which we have been developing since the birth of Anthropic. The LTBT is our attempt to fine-tune our corporate governance to address the unique challenges and long-term opportunities we believe transformative AI will present . The Trust is an independent body of five financially disinterested members with an authority to select and remove a portion of our Board that will grow over time (ultimately, a majority of our Board). Paired with our Public Benefit Corporation status, the LTBT helps to align our corporate governance with our mission of developing and maintaining advanced AI for the long-term benefit of humanity.

Corporate Governance Basics A corporation is overseen by its board of directors. The board selects and oversees the leadership team (especially the CEO), who in turn hire and manage the employees. The default corporate governance setup makes directors accountable to the stockholders in several ways. For example: Directors are elected by, and may be removed by stockholders. Directors are legally accountable to stockholders for fulfilling their fiduciary duties. Directors are often paid in shares of stock of the corporation, which helps to align their incentives with the financial interests of stockholders.

Importantly, the rights to elect, remove, and sue directors belong exclusively to the stockholders. Some wonder, therefore, whether directors of a corporation are permitted to optimize for stakeholders beyond the corporation’s stockholders, such as customers and the general public. This question is the subject of a rich debate, which we won’t delve into here. For present purposes, it is enough to observe that all the key mechanisms of accountability in corporate law push directors to prioritize the financial interests of stockholders.

Fine-tuning Anthropic ’ s Corporate Governance Corporate governance has seen centuries of legal precedent and iteration, and views differ greatly on its effectiveness, strengths, and weaknesses. At Anthropic, our perspective is that the capacity of corporate governance to produce socially beneficial outcomes depends strongly on non-market externalities. Externalities are a type of market failure that occurs when a transaction between two parties imposes costs or benefits on a third party who has not consented to the transaction. Common examples of costs include pollution from factories, systemic financial risk from banks, and national security risks from weapons manufacturers. Examples of positive spillover effects include the societal benefits of education that reach beyond the individuals being educated, or investments in R&D that boost entire sectors beyond the company making the investment. Many parties who contract with a corporation, such as customers, workers, and suppliers, are capable of negotiating or demanding prices and terms that reflect the full costs and benefits of their exchanges. But other parties, such as the general public, don’t directly contract with a corporation and therefore do not have a means to charge or pay for the costs and benefits they experience.

The greater the externalities, the less we expect corporate governance defaults to serve the interests of non-contracting parties such as the general public. We believe AI may create unprecedentedly large externalities , ranging from national security risks, to large-scale economic disruption, to fundamental threats to humanity, to enormous benefits to human safety and health. The technology is advancing so rapidly that the laws and social norms that constrain other high-externality corporate activities have yet to catch up with AI; this has led us to invest in fine-tuning Anthropic’s governance to meet the challenge ahead of us.

To be clear, for most of the day-to-day decisions Anthropic makes, public benefit is not at odds with commercial success or stockholder returns, and if anything our experience has shown that the two are often strongly synergistic: our ability to do effective safety research depends on building frontier models (the resources for which are greatly aided by commercial success), and our ability to foster a “race to the top” depends on being a viable company in the ecosystem in both a technical sense and a commercial sense. We do not expect the LTBT to intervene in these day-to-day decisions or in our ordinary commercial strategy.

Rather, the need for fine-tuning of the governance structure ultimately derives from the potential for extreme events and the need to handle them with humanity’s interests in mind, and we expect the LTBT to primarily concern itself with these long-range issues. For example, the LTBT can ensure that the organizational leadership is incentivized to carefully evaluate future models for catastrophic risks or ensure they have nation-state level security, rather than prioritizing being the first to market above all other objectives.

Baseline: Public Benefit Corporation One governance feature we have already shared is that Anthropic is a Delaware Public Benefit Corporation, or PBC. Like most large companies in the United States, Anthropic is incorporated in Delaware, and Delaware corporate law expressly permits the directors of a PBC to balance the financial interests of the stockholders with the public benefit purpose specified in the corporation’s certificate of incorporation, and the best interests of those materially affected by the corporation’s conduct. The public benefit purpose stated in Anthropic’s certificate is the responsible development and maintenance of advanced AI for the long-term benefit of humanity. This gives our board the legal latitude to weigh long- and short-term externalities of decisions–whether to deploy a particular AI system, for example–alongside the financial interests of our stockholders.

The legal latitude afforded by our PBC structure is important in aligning Anthropic’s governance with our public benefit mission. But we didn’t feel it was enough for the governance challenges we foresee in the development of transformative AI. Although the PBC form makes it legally permissible for directors to balance public interests with the maximization of stockholder value, it does not make the directors of the corporation directly accountable to other stakeholders or align their…