Now, I have nothing but respect for Carly Fiorina.
September 23, 2000 12:12 PM Subscribe
Now, I have nothing but respect for Carly Fiorina. She's done an outstanding job at HP and deserves to be rewarded. But I've never understood this business of having the CEO also be the chairman of the Board.
The most important job that the Board of Directors has is to decide when to fire the CEO, which I emphasize that Ms. Fiorina does not deserve in the slightest at this time. But that time may eventually come, as it does for all CEOs, and how the hell do you do it if the CEO you're trying to fire is also the chairman of the Board of Directors?
Would Corel be in the mess it's in today if Michael Cowpland had not been on its board?
The most important job that the Board of Directors has is to decide when to fire the CEO, which I emphasize that Ms. Fiorina does not deserve in the slightest at this time. But that time may eventually come, as it does for all CEOs, and how the hell do you do it if the CEO you're trying to fire is also the chairman of the Board of Directors?
Would Corel be in the mess it's in today if Michael Cowpland had not been on its board?
I like the design. It's simple and clear.
I don't really see what that has to do with Ms. Fiorina being made CEO.
Would Corel be a company if Michael Cowpland had not been on it's board?
I seem to be all primed to disagree with you today Steven.
posted by cCranium at 2:59 PM on September 23, 2000
I don't really see what that has to do with Ms. Fiorina being made CEO.
Would Corel be a company if Michael Cowpland had not been on it's board?
I seem to be all primed to disagree with you today Steven.
posted by cCranium at 2:59 PM on September 23, 2000
I think there was an interval in which Michael Cowpland was an asset to Corel, followed by an interval during which Corel would have been better off without him.
It's the job of the board to detect and act when the CEO ceases to be an asset. In the case of Corel, they did not do so (he eventually left voluntarily but much too late) and as a result the future of the corporation is in serious doubt. If the board had acted and pensioned him off about three years ago, Corel would be a much stronger and more formidable company today.
posted by Steven Den Beste at 5:31 PM on September 23, 2000
It's the job of the board to detect and act when the CEO ceases to be an asset. In the case of Corel, they did not do so (he eventually left voluntarily but much too late) and as a result the future of the corporation is in serious doubt. If the board had acted and pensioned him off about three years ago, Corel would be a much stronger and more formidable company today.
posted by Steven Den Beste at 5:31 PM on September 23, 2000
Whether or not the CEO is Board Chairman is largely immaterial to the Board's ability / willingness to supervise the CEO these days, at least in Fortune 1000 companies.
For better or worse, the _real_ supervision of a CEO is done by the business columnists and the equities analysts ... once they turn against a CEO, the Board will start to stir.
posted by MattD at 9:57 PM on September 23, 2000
For better or worse, the _real_ supervision of a CEO is done by the business columnists and the equities analysts ... once they turn against a CEO, the Board will start to stir.
posted by MattD at 9:57 PM on September 23, 2000
Matt, that sounds plausible, but the press and analysists have been beating up Michael Cowpland for years, and he only left when he decided to do so on his own.
posted by Steven Den Beste at 10:49 PM on September 23, 2000
posted by Steven Den Beste at 10:49 PM on September 23, 2000
Steven, this is actually a lot more common than you'd think. I agree it doesn't make sense, but it's practiced that way a lot.
The same holds true in the non-profit world. My dad ran two historical societies, and the way he saw it, there would be a professional Director supervised by an energetic Board of Trustees who had a sense of the organization's mission and were themselves involved in, for example, fundraising. The way a LOT of nonprofits work in practice is a Board of Directors (bad choice of name) who nominally supervise an Executive Director, the latter being the true source of direction in the organization, with fundraising often farmed out to contractors. It leads to a much different kind of organizational style and culture, and I'm sure the same holds true in the business world. (I operate there myself, just not, generally, at a level where I see the same kinds of decisionmaking up close.)
posted by dhartung at 11:52 PM on September 23, 2000
The same holds true in the non-profit world. My dad ran two historical societies, and the way he saw it, there would be a professional Director supervised by an energetic Board of Trustees who had a sense of the organization's mission and were themselves involved in, for example, fundraising. The way a LOT of nonprofits work in practice is a Board of Directors (bad choice of name) who nominally supervise an Executive Director, the latter being the true source of direction in the organization, with fundraising often farmed out to contractors. It leads to a much different kind of organizational style and culture, and I'm sure the same holds true in the business world. (I operate there myself, just not, generally, at a level where I see the same kinds of decisionmaking up close.)
posted by dhartung at 11:52 PM on September 23, 2000
how the hell do you do it if the CEO you're trying to fire is also the chairman of the Board of Directors?
Director1: I move to terminate the CEO of the company.
Director2: I second the motion.
Chair: Um.... um...
Director1: We have a motion on the floor. Let's move to a vote.
Chair: Um... um...
Director1: [seizes gavel, calls the motion to a vote]
Director1: The motion passes by a vote of 8 in favor, 1 against. The CEO is hereby terminated. I yield the gavel back to the chair.
posted by mikewas at 2:03 AM on September 24, 2000
Director1: I move to terminate the CEO of the company.
Director2: I second the motion.
Chair: Um.... um...
Director1: We have a motion on the floor. Let's move to a vote.
Chair: Um... um...
Director1: [seizes gavel, calls the motion to a vote]
Director1: The motion passes by a vote of 8 in favor, 1 against. The CEO is hereby terminated. I yield the gavel back to the chair.
posted by mikewas at 2:03 AM on September 24, 2000
Some CEOs (but not many, these days) are strong enough to withstand years of negative analyst and press coverage, and declining share prices, but that power of their Boards usually has little to do with whether or not they are Chair.
Remember, a long-serving CEO will have _hand-picked_ essentialy every Director serving on the Board. A Board that doesn't allow the CEO to direct the Nominating Committee is essentially deciding _not to have a CEO_ as they are conventionally understood. Very few companies adopt a "weak CEO" regime, mainly because good executives won't accept them ... cf Apple in its interregnum years (after Scully, but before Jobs took public control again).
posted by MattD at 11:26 AM on September 24, 2000
Remember, a long-serving CEO will have _hand-picked_ essentialy every Director serving on the Board. A Board that doesn't allow the CEO to direct the Nominating Committee is essentially deciding _not to have a CEO_ as they are conventionally understood. Very few companies adopt a "weak CEO" regime, mainly because good executives won't accept them ... cf Apple in its interregnum years (after Scully, but before Jobs took public control again).
posted by MattD at 11:26 AM on September 24, 2000
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posted by physics at 2:13 PM on September 23, 2000