The article in the url below by Mallen Baker (Foreword, pxiii) presents an argument in support of the modern CEO and a critique of the short term nature of many business decisions today:
“Chief executives come in with impossible expectations, knowing that the moment they fail to meet them, they will be out. They demand huge returns because if they’re only going to be in the job for two or three years (which is now the average tenure) and they don’t know how damaged they will be at the end, they want to know they will be financially secure. And many of the perceived failings are out of their control. Any chief executive today could be fired because the stock price is below where it was a couple of years ago. And everyone would be angry at any pay-off as being a “reward for failure”.”
While Baker’s argument is valid, CEOs cannot have it both ways. While many CEOs are certainly blamed for events for which they should not be held responsible, they are also given way too much credit for success that is either largely independent of their actions (e.g., the whole market or industry is doing well) or occurred in spite of their dazzling new strategies. If CEOs want the room for error for which Baker is arguing (which, I agree, would be a positive step for business), they also need to accept compensation packages that more accurately reflect the limited contribution of a single, often flawed, individual.
Take care
David
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther/
Leadership – All fail the chief
If chief executives were given more time to succeed, there would be fewer rewards for failure
Mallen Baker
June 12, 2009
http://www.ethicalcorp.com/content.asp?ContentID=6500
or
http://www.volans.com/wp-content/uploads/2009/09/ethicalcorp_reporting_june09.pdf
