The NewCo Daily: Today’s Top Stories
The recent exits of chief executives at General Electric, Ford, and U.S. Steel are the latest indications that “the American era of the baronial chief executive” is over, writes Nelson Schwartz in The New York Times. That’s the result of massive changes in both the nature of the businesses these leaders run and the shape of the jobs that investors, employees, and the public expect them to tackle.
The landscape is full of new forces that make long-term, high-profile tenures like that of Jeffrey Immelt at GE less and less common. One of them is the rise of “activist investors,” who buy up chunks of stock and then make demands for higher profitability that often put a CEO’s strategy and job in jeopardy. Another is the speed of technological change, with advances in artificial intelligence, sensors, and processing beginning to collapse the boundaries between businesses.
As one business professor asks in the Times piece, “Who ever thought Ford would be competing with Google?” Also: Some boards are beginning to change, “evolving from country-club-like collections of the same familiar faces into a much more diverse and demanding constituency” that’s less likely to sit back passively while a feudal CEO issues orders.
These forces can reinforce one another, but they can also collide. “Activist investors” (ironically, given the label) frown on execs who take political stands — they just want to see the money. But more diversified boards are more likely to expect firms to be good citizens and embrace social causes.
Either way, CEOs who long for the “Olympus-like sense of remoteness, authority and defined hierarchy” that their predecessors enjoyed are out of luck. The one exception is tech — where CEOs long ago dropped the royal trappings and luxurious offices but hung on to voting control and friendly boards.
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