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Many companies aren’t prepared to replace underperforming CEOs

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Re: Many companies aren’t prepared to replace underperforming CEOs

#121

Post by MichaelZuo »

zeristor wrote: post #104
MichaelZuo wrote: post #95

Earlier quoted context omitted.

This is usually resolved by requiring a minimum ownership stake for each prospective board member, and to make sure it represents a significant fraction of their total net worth. To guarantee that the board would lose their shirts if they make decisions completely opposite to reality, thus motivating a more thorough investigation of what they see and hear.

Sounds a bit like buying a commission, by having enough money you proved worthy of it.

It is quite similar, the most widespread usage historically would likely be the 18th century trading companies such as the British East India Company which used this method along with others to operate with a relatively tiny managerial workforce by modern standards.

There was another post on HN a few weeks back with an article that looked into it and the numbers were really staggering.

Re: Many companies aren’t prepared to replace underperforming CEOs

#122

Post by BlargMcLarg »

kennend3 wrote: post #118
BlargMcLarg wrote: post #102

Earlier quoted context omitted.

A strike wouldn't be to remove a C-level as much as really drill home the consequences of poor decisions. Individuals are still too lenient in letting themselves go through the burnout treadmill for the upper trenches to feel it.

Most strikes tend to be around : - More money - Better job security Like the one taking place here right now "On October 30, 2022, the Canadian Union of Public Employees (CUPE), issued a strike notice, after the Government of Ontario refused their demands for an 11.7% salary increase alongside other requests for improved working conditions." They are not after any "change" to how things are done, just a massive 11.7%…

I'm not trying to refute your point. You're allowed to be a little less aggressive.

Point being strikes typically hit C-levels indirectly, not directly. A short term loss and display of collective power which could be avoided with foresight. Individuals are more often targeted through boycotting.

Re: Many companies aren’t prepared to replace underperforming CEOs

#123

Post by Gibbon1 »

Apocryphon wrote: post #4

Random idea- has any corporation operated with something akin to term limits?

I had an airplane conversation with a manager at a multinational. He said they shuffled managers every couple of years. Bunch of reasons for that but partly gave the company better visibility into what's going on with a group because you have several managers on tap who've managed that group before. And if they have to fire a manager they have a number of people to tap for that role.

Re: Many companies aren’t prepared to replace underperforming CEOs

#124

Post by zac_hudson »

rogerkirkness wrote: post #7
Apocryphon wrote: post #4

Random idea- has any corporation operated with something akin to term limits?

Huawei does this, I think every 18 months they change CEO among the leadership team.

Huawei has a very unusual leadership/ownership structure, even amongst its peers in the tech industry. Legally, its a worker-owned cooperative, but unlike most cooperatives, its workers don't directly vote on policy; rather they choose 51 shareholder representatives and 9 alternate representatives, who in turn select a politburo, which in turn selects a CEO from the standing committee.

Re: Many companies aren’t prepared to replace underperforming CEOs

#125

Post by shoeshoeshoey »

mkl95 wrote: post #18

One of the C-level guys at my current company should have been replaced a while ago. He ruins everything he touches but he's also one of the founders. There are virtually no processes for anything which makes him untouchable. Whenever he fucks up, some PM or low level manager is fired due to their "low performance". Is there anything non C-levels can do about it? Honestly I don't think so, all you can do is avoid the…

You work at Meta, too?

Re: Many companies aren’t prepared to replace underperforming CEOs

#126

Post by indymike »

Many CEOs have very one-sided contracts that makes firing them expensive. A great number of companies have boards that are highly sympathetic to the CEO which makes it take even more effort. In a lot of cases bigger shareholders referred the CEO to the board when they hired the CEO, so the board members that represent that shareholder's interests are invested in the bad CEO. So, you basically end up having to fire a friend that your friends invested in and lose a lot of money, and then have to find a new CEO.

I really like companies where the board isn't friendly to the CEO, and their meetings start with a vote on, "Shall the CEO be retained?" If there's a "No", then the floor opens for a discussion of CEO performance.

Re: Many companies aren’t prepared to replace underperforming CEOs

#127

Post by Gibbon1 »

mbaytas wrote: post #117
Gibbon1 wrote: post #84

Earlier quoted context omitted.

I worked one place where they brought in a new director who wasn't functionally competent. I have theories of why which are all probably partly true. Like he saw actually engaging and managing his division as a distraction from social engineering a lateral move up the ladder. Eventually everyone under him in mass went to his boss and HR and told them flat out he needed to go. And the company did nothing for 18 months…

I have a theory that when the C-suite decides to slay an entire division they assign an incompetent boss. Give them a few months to mess it up. Then go for the kill. The incompetent new boss magically absorbs all the blame.

> whole division of 25 experienced RF chip designers.

Re: Many companies aren’t prepared to replace underperforming CEOs

#128

Post by kibwen »

lovich wrote: post #50
mkl95 wrote: post #18

One of the C-level guys at my current company should have been replaced a while ago. He ruins everything he touches but he's also one of the founders. There are virtually no processes for anything which makes him untouchable. Whenever he fucks up, some PM or low level manager is fired due to their "low performance". Is there anything non C-levels can do about it? Honestly I don't think so, all you can do is avoid the…

There’s nothing you can do because the companies are dictatorships or oligarchies at best, not democracies or meritocracies. If he’s the founder presumably he had enough ownership in the company to force the company to keep him in that position. Changing that up requires a radical redesign of how companies are legally constrained in the US or a cultural change that causes an expectation of worker ownership so that th…

Employee-owned companies aren't entirely unheard-of in the US. Legally, they're structured as companies where employees own more than 50% of its shares via an ESOP: https://en.wikipedia.org/wiki/Employee_stock_ownership

Re: Many companies aren’t prepared to replace underperforming CEOs

#129

Post by Cupertino95014 »

I've seen a couple of CEO replacements, who were brought in for various reasons. You'd expect a B-school like Stanford to stress "planning" since that's their solution to everything.

For the new CEOs I've seen, "they've been there before" seems to receive WAY more weight than it ought to. Often they're people who just keep failing up.

You can take the Civil War as a useful analogy. Neither Grant nor Sherman had really "been there before" the war, and their resumes were decidedly unimpressive. Somehow the test of actually doing it won out over their lack of formal qualifications.

Re: Many companies aren’t prepared to replace underperforming CEOs

#130

Post by JamesianP »

xboxnolifes wrote: post #68
MuffinFlavored wrote: post #64

Earlier quoted context omitted.

> He ruins everything he touches but he's also one of the founders. Statements like this are always so interesting to me online from the "there's two sides to every story" perspective. Why not devil's advocate it and try to walk through life maybe not thinking in blanket statements? How can somebody who ruins everything be successful at all in life? Maybe I just have more to learn...

He's successful because he's part of a successful team.

Or just completely taking credit from others without sharing it.

And as a corollary, flat out stealing ideas/code/whatever. If it's still just a startup, no one (that matters) may have every done a thorough search yet to be sure that the technology provided by the founders is original. Or course it won't survive scrutiny from the press or due diligence from a potential buyer or anything.

A friend of mine worked with a startup where there were three founders and they were all notorious for taking unearned credit. I think at least one was a pathological liar. As time when on, the true origins of everything they "contributed" came out. Depending on how good they were at bs'ing and raising money at least, a couple were were fired quickly and the last one took years to get rid of (a big enough fraud scandal finally went public).

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