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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

#161

Post by yellowstuff »

MichaelZuo wrote: post #95
goopthink wrote: post #61

The company board’s sole job is to hire and fire the CEO when appropriate: https://reactionwheel.net/2021/11/your-boards-of-directors-i... However, having been on a team that prepares board materials and also having presented to a company board, I can tell you that the information they receive is extremely carefully managed in a way that allows responsibility to seem to flow downwards rather than upwards. What you se…

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.

I think that's the exception, not the rule. Many large public companies have many board members with only trivial ownership stakes.

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

#162

Post by darkerside »

MichaelZuo wrote: post #95
goopthink wrote: post #61

The company board’s sole job is to hire and fire the CEO when appropriate: https://reactionwheel.net/2021/11/your-boards-of-directors-i... However, having been on a team that prepares board materials and also having presented to a company board, I can tell you that the information they receive is extremely carefully managed in a way that allows responsibility to seem to flow downwards rather than upwards. What you se…

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.

What? In what case has this ever happened?

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

#163

Post by pprotas »

naikrovek wrote: post #153

ok so what do CEOs do? hell, what does my manager do? other than calendars full of meetings, I don't know what any manager does. as a technical person my entire career, the only things that my managers have ever done is to have regular meetings where we talk about non-work stuff, or they tell me that I am in trouble and/or fired. the only thing that I know that they actually do is make technical decisions based on no…

Don't know what CEOs do, but a good manager is just supposed to unblock you from business. They are there to make sure you don't have to worry about the CEO stuff and whatever, you can just focus on your job.

If your manager is making technical decisions for you, something might be wrong!

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

#164

Post by taberiand »

zac_hudson wrote: post #124
rogerkirkness wrote: post #7

Earlier quoted context omitted.

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.

Sounds great, what's the catch?

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

#165

Post by lifeisstillgood »

It seems pretty obvious (#) that more democracy inside companies is going to bring benefits. I mean we believe that our past two hundred years of growth is in part down to the ability for a democracy to harness new chnage and ideas and adapt as needs be. So if it works for countries why not companies? Especially as there are plenty of companies who employ more people than some countries have citizens and many companies who control more funds than GDP of dozens of countries?

It's something we should believe, balls to bone.

So why have we still got dictators in our private markets when we won't tolerate them in our ballot boxes?

My guesses :

- it really is about the wealthy and the elites. Only cataclysms seem to seperate the wealthy from their grasp on power - the end of WW2 led to the birth of pretty much all modern democracies, and the death of the USSR found the rest.

- There is a lot of baby in modern capitalism, but also a fair amount of bathwater. We could throw out one and keep the other if we are careful. I honestly don't think that "I own all the voting shares so FU" is a great way to organise Facebook's billions, and a lot of people tend to agree. However why stop at dualmclass voting shares. Why is the AGM vote on director remuneration non-binding? Why don't employees get to vote for their boss? Vote on the yearly budget? I think if we chose the C-suite like we choose our parliament we might read the manifesto a little more closely.

- Imagine a world where UBI magically worked and we all chose to work based on not can we make rent this week but "is this group of people actually any good and able to deliver the thing that's needed?" How often would we chnage jobs? How large a company is too large?

I don't have any real answers - I barely can articulate the questions. But Where we are today is incredible compared to the past ten thousand years of human history. But how we organise our selves today, how we react as a species to the coming storms will determine if there is another ten thousand years or not. And I am damn sure that billionaires and hero leaders are not the solution we need.

(#) From a middle class man raised and educated in a modern democracy

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

#166

Post by MichaelZuo »

darkerside wrote: post #162
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.

What? In what case has this ever happened?

Berkshire, Costco to a certain extent, many of the big Japanese and Korean conglomerates, Bosch, Dassault, traditional old money banks, etc...

Excluding external board members, by definition.

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

#167

Post by robotresearcher »

noasaservice wrote: post #54
siva7 wrote: post #44

Earlier quoted context omitted.

corporations are not democratic institutions

That's a good question: Why not? The USA "ideals" taught in school say that democracy and democratic republics are the best forms of government.... yet (almost) all our companies are autocratic dictatorships.

The people to whom the org is responsible are the (Greek) demos[1]. For governments, this is the people. For corporations, this is the shareholders. Corporations are somewhat democratic WRT their demos.

[1] https://en.wiktionary.org/wiki/demos

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

#168

Post by lenzm »

jandrese wrote: post #148
startupsfail wrote: post #143

Earlier quoted context omitted.

The CEOs that belong to the club (network) can draw on the resources available to that network. It is widely believed that this ability is more important than the technical skills. It used to be correct when e-mail, LinkedIn or Google were not a thing. Now this is simply a cargo cult.

That smells like rationalization to me. "No candidate outside of my personal circle of friends could possibly do this job because being in the circle is required to do the job."

More like self fulfilling prophecy. The clique preferentially favors doing business with each other causing their businesses to perform better.

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

#169

Post by kibwen »

User23 wrote: post #137
kibwen wrote: post #128

Earlier quoted context omitted.

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

A fun example along those lines is the Green Bay Packers[1]. They are a public non-profit whose shares are largely owned by members of the Green Bay community. Shareholding is mostly a matter of community pride, as it confers very few rights[2]. It's actually a pretty good model, and I wonder why it isn't used for other municipal assets. [1] https://en.wikipedia.org/wiki/Green_Bay_Packers,_Inc . [2] https://www.wsj.c…

Legally speaking I think that might be in a different category than what I was referring to (nonprofit vs corporation). And there are other legal structures, like co-operatives (and credit unions?), with similar ideas.

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

#170

Post by kingkawn »

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…

Feudalism lives on beneath a thin veneer of electoral democracy
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