Lead Director Stephen Neal Expected to Play Central Role in Nvidia's Huang Inquiry

Nvidia's board opened the inquiry after Huang admitted to an affair with a Chinese businesswoman whom US intelligence agencies believe is a Chinese spy. The company has not named the people conducting the review, saying only that the board is leading it with help from outside counsel. In a statement, the board said it has "no reason to believe that either national security or Nvidia secrets were compromised," but that it will examine all the evidence. Huang has said he will "cooperate fully". China has rejected the espionage claims.

Who runs the review matters because the result will shape how investors and Washington judge the world's most valuable chipmaker and the executive most closely identified with it. In a note on Monday, Citi analysts said the key issues for investors would be "potential governance implications" and "increased regulatory scrutiny" as Nvidia works through the inquiry.

Neal joined Nvidia's board in 2019. He is chairman emeritus and senior counsel at the law firm Cooley, where he was chief executive from 2001 to 2008. According to Cooley, he has litigated securities, bankruptcy, antitrust and takeover cases and has carried out several investigations for boards and committees of independent directors, most of them for clients the firm does not name. Those include work for General Motors in its disputes with Ross Perot. He also represented Walter Hewlett and the Hewlett Trust in their attempt to block Hewlett-Packard's merger with Compaq, and has handled Securities and Exchange Commission investigations for companies and individuals.

He was chairman of Levi Strauss & Co. when he joined Nvidia and stepped down from that board in 2021 on reaching its mandatory retirement age of 72.

Cooley's ties to Nvidia run deep. The firm says it incorporated the company in 1993, handled its 1999 initial public offering and has been its principal outside corporate and litigation counsel for roughly three decades. Neal did not immediately respond to CNBC's request for comment.

Nvidia's board has 10 independent members, including a former president of Taco Bell, a former Eli Lilly executive and a former Goldman Sachs vice chairman.

Brayden King, a professor of management and organisations at Northwestern University's Kellogg School of Management, told CNBC that investors want the review led by someone whose findings they can trust, and that the lack of an immediate succession plan for Huang was hurting confidence. "The independent review is going to have to be truly independent, and it's going to have to be candid enough that people believe that we can restore some normalcy around how the company operates," he said. If the inquiry finds national security was put at risk, he added, Nvidia would need "very strong measures", including new governance structures, to restore its reputation.

Marcel Kahan, a law professor at New York University, told CNBC that the company was likely to put a thorough investigation ahead of transparency to investors, and that the outcome could include additional governance committees and more specialised training to protect trade secrets.

The board has not said how long the review will take or whether its findings will be published.