<story><title>Many companies aren’t prepared to replace underperforming CEOs</title><url>https://www.gsb.stanford.edu/insights/many-companies-arent-prepared-replace-underperforming-ceos</url></story><parent_chain><item><author>bluefirebrand</author><text>I have to wonder if it should be considered a legal conflict of interest for a CEO to sit on the board at all, forget being chairman.&lt;p&gt;The powerful really love rigging stuff in their favor huh</text></item><item><author>DebtDeflation</author><text>Many corporate boards have an &amp;quot;executive chairman&amp;quot; which means the CEO is also the Chairman of the Board.  Perhaps even more importantly a substantial number of board members are executives from other companies, meaning CEOs sit on each others boards and wash each others&amp;#x27; backs.</text></item><item><author>goopthink</author><text>The company board’s sole job is to hire and fire the CEO when appropriate: &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;reactionwheel.net&amp;#x2F;2021&amp;#x2F;11&amp;#x2F;your-boards-of-directors-is-probably-going-to-fire-you.html&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;reactionwheel.net&amp;#x2F;2021&amp;#x2F;11&amp;#x2F;your-boards-of-directors-i...&lt;/a&gt;&lt;p&gt;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 see as an IC or as a manager or ever director is extremely different from the cause and effects a board sees in a monthly or quarterly update. Hence they often come to different conclusions than the people in the trenches would. That said, I’m sure this is true for any large organizational unit (government, military, corporations, nonprofits, etc).</text></item></parent_chain><comment><author>xwolfi</author><text>It is know since companies have existed that this is indeed bad corporate governance. The CEO should be firable at the leisure of the board, and the board at the leisure of the shareholders.&lt;p&gt;What seems to happen often is blurried lines: the ceo founder is majority shareholder, the board is his family, friends and paid lawyers, the shareholders are asleep at the wheel as long as some profits rain in, the regulator finds no law broken.&lt;p&gt;Tesla is a model of bad governance, to the point the harshest sanction a regulator could levy against their chairman&amp;#x2F;ceo for manipulating the stock price, a capital sin, is to make him only CEO, while not removing his family members from the board... a systemic european bank is the model of good governance: you can see epic ceo vs board fights, shareholder revolutions etc etc.</text></comment>
<story><title>Many companies aren’t prepared to replace underperforming CEOs</title><url>https://www.gsb.stanford.edu/insights/many-companies-arent-prepared-replace-underperforming-ceos</url></story><parent_chain><item><author>bluefirebrand</author><text>I have to wonder if it should be considered a legal conflict of interest for a CEO to sit on the board at all, forget being chairman.&lt;p&gt;The powerful really love rigging stuff in their favor huh</text></item><item><author>DebtDeflation</author><text>Many corporate boards have an &amp;quot;executive chairman&amp;quot; which means the CEO is also the Chairman of the Board.  Perhaps even more importantly a substantial number of board members are executives from other companies, meaning CEOs sit on each others boards and wash each others&amp;#x27; backs.</text></item><item><author>goopthink</author><text>The company board’s sole job is to hire and fire the CEO when appropriate: &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;reactionwheel.net&amp;#x2F;2021&amp;#x2F;11&amp;#x2F;your-boards-of-directors-is-probably-going-to-fire-you.html&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;reactionwheel.net&amp;#x2F;2021&amp;#x2F;11&amp;#x2F;your-boards-of-directors-i...&lt;/a&gt;&lt;p&gt;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 see as an IC or as a manager or ever director is extremely different from the cause and effects a board sees in a monthly or quarterly update. Hence they often come to different conclusions than the people in the trenches would. That said, I’m sure this is true for any large organizational unit (government, military, corporations, nonprofits, etc).</text></item></parent_chain><comment><author>osigurdson</author><text>Unfortunately, no organizational structure exists which guarantees optimal outcomes. Everything depends on the actual individuals who occupy the roles.&lt;p&gt;Such structures should ultimately be up to the shareholders.</text></comment>