Boards, activists, CEOs—who’s your daddy?
by Miki Saxon
What a difference a year makes. Last year Wall Street Journal columnist Alan Murray wrote Revolt in the Boardroom: The New Rules of Power in Corporate America
. (Excerpt) detailing the war between Boards, shareholders and CEOs.
He remembers the time when CEOs were all-powerful autocrats running top-down organizations under the auspices of Boards comprised friends and colleagues. The came the revolt and CEOs started being dumped right and left.
How large was the turnover tally last year and was it really that different from what it used to be?
Generally speaking, prior to the 1990s CEOs weren’t fired. During the Nineties Boards ousted a few high profile cases, such as GM, IBM, American Express, but by mid-2000 things really started changing and have continued apace—663 in 2004, 1322 in 2005, 1478 in 2006, but ‘only’ 1,356 2007.
Of course, not all were fired, some retired, some took outside offers, but a great number left by, or just before, Board request and some left in a very public perp walk.
By the time the book came out, six years after Enron, most of us thought we’d seen the worst; we believed that governance had changed and that Boards and investor activists had tamed CEO ego.
Many thought that it was a permanent shift in power away from CEOs, but it took only a year to show how inaccurate that analysis was.
It might be true when dealing with felonious intention, but when it comes to “maximizing shareholder returns” it seems like anything legal still goes.
But even slightly out of date, Revolt in the Boardroom is a good read—educational, entertaining and offering some unique insights into the corner office.
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