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It isn't even a settled debate whether CEOs know what is going on or are a particularly important driver of outcomes. It's pretty clear that a negligent/crimin

It isn't even a settled debate whether CEOs know what is going on or are a particularly important driver of outcomes. It's pretty clear that a negligent/criminal CEO will lead to the bankruptcy of a company and a loss for investors. So yes, you can say at the extreme end that CEO's are drivers of important outcomes. Now whether it's effective I think is another subject all-together. My own opinion is that micro-expressions, body language, etc. have been studied and used by the FBI/CIA for their field work. The idea being that once you establish a baseline behavior, you can notice "clusters" that deviate from the baseline based on verbal+non-verbal cues. So I don't see why an AI couldn't do the job.

enkid 5y ago
A lot of things have been studied, the question is what evidence they have that it actually works. It seems similar to one of those things where people have made a lot of claims with only dubious evidence.
danielmarkbruce 5y ago
Warren Buffett has a famous saying: "I always invest in companies an idiot could run, because one day one will". There are many companies where it's likely that a negligent CEO (even a criminal one) wouldn't lead to the bankruptcy or even close. Many companies might be better off with a negligent CEO rather than one actually trying to do much. Right now Google could be run by a person on the beach sipping margaritas. Many other big public companies with very strong competitive positions probably could too.
- andreilys 5y ago
  Sure tell that to theranos and Enron. A criminal ceo will often lead to the dissolution of a company so I don’t really see how this follows.
  - danielmarkbruce 5y ago
    Theranos never had a real business. So it didn't dissolve so much as never existed. Sure, the legal entity was created and dissolved, but there wasn't ever anything approaching a real business. Most of Enron (some was actually ok) wasn't a real business either. It follows like this: A great business can often be run by a fool and be fine, because the business is just so good. Think Google, Coke, and almost all newspaper companies in the 20th century. The opposite is not true - a terrible business is hosed no matter how good the CEO is. Think farms, most retail businesses, newspapers in the 21st century. And most companies sit somewhere in the middle - the CEO can make a difference.
    - herval 5y ago
      What’s your definition of a “real business”? Enron had revenue of over 100bn, 30k employees, and delivered actual products and services for many years. How’s that not “a real business”?
      - danielmarkbruce 5y ago
        In my mind there are multiple types of "not real" business. Two obvious types: i) A business where the true state of it is being hidden to raise money to keep it afloat and it's not sustainable without raising said capital. Enron did this, raising lots of debt financing. Theranos did it with equity. ii) A business which isn't sustainable over any time period without external money to keep it afloat. It need not be fraud, it could just be stupidity on part of investors, executives. Many internet bubble businesses were this type of "not real". Enron had a lot of businesses under the corporate umbrella. Some of them were real (they owned hard assets, pipelines, energy generation assets). However, a lot of the revenue from other businesses was fake - derivatives revaluation accounting tricks (like, "hey this derivative contract is now worth $50 mill more because of some analysis we did, up goes revenue"), debt hidden via special purpose entities, and other similar things. The "not real" part of Enron was so big that it's debts brought down the rest of it. The chapter 11 process sold the real assets and the creditors got some money back and some employees stayed with those business.

enkid 5y ago

A lot of things have been studied, the question is what evidence they have that it actually works. It seems similar to one of those things where people have made a lot of claims with only dubious evidence.

danielmarkbruce 5y ago

Warren Buffett has a famous saying: "I always invest in companies an idiot could run, because one day one will". There are many companies where it's likely that a negligent CEO (even a criminal one) wouldn't lead to the bankruptcy or even close. Many companies might be better off with a negligent CEO rather than one actually trying to do much. Right now Google could be run by a person on the beach sipping margaritas. Many other big public companies with very strong competitive positions probably could too.

andreilys 5y ago
Sure tell that to theranos and Enron. A criminal ceo will often lead to the dissolution of a company so I don’t really see how this follows.
- danielmarkbruce 5y ago
  Theranos never had a real business. So it didn't dissolve so much as never existed. Sure, the legal entity was created and dissolved, but there wasn't ever anything approaching a real business. Most of Enron (some was actually ok) wasn't a real business either. It follows like this: A great business can often be run by a fool and be fine, because the business is just so good. Think Google, Coke, and almost all newspaper companies in the 20th century. The opposite is not true - a terrible business is hosed no matter how good the CEO is. Think farms, most retail businesses, newspapers in the 21st century. And most companies sit somewhere in the middle - the CEO can make a difference.
  - herval 5y ago
    What’s your definition of a “real business”? Enron had revenue of over 100bn, 30k employees, and delivered actual products and services for many years. How’s that not “a real business”?
    - danielmarkbruce 5y ago
      In my mind there are multiple types of "not real" business. Two obvious types: i) A business where the true state of it is being hidden to raise money to keep it afloat and it's not sustainable without raising said capital. Enron did this, raising lots of debt financing. Theranos did it with equity. ii) A business which isn't sustainable over any time period without external money to keep it afloat. It need not be fraud, it could just be stupidity on part of investors, executives. Many internet bubble businesses were this type of "not real". Enron had a lot of businesses under the corporate umbrella. Some of them were real (they owned hard assets, pipelines, energy generation assets). However, a lot of the revenue from other businesses was fake - derivatives revaluation accounting tricks (like, "hey this derivative contract is now worth $50 mill more because of some analysis we did, up goes revenue"), debt hidden via special purpose entities, and other similar things. The "not real" part of Enron was so big that it's debts brought down the rest of it. The chapter 11 process sold the real assets and the creditors got some money back and some employees stayed with those business.