8 ms·

Many corporate boards have an "executive chairman" which means the CEO is also the Chairman of the Board. Perhaps even more importantly a substantial number of

Many corporate boards have an "executive chairman" 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' backs.

bluefirebrand 4y ago
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. The powerful really love rigging stuff in their favor huh
- taneq 4y ago
  > The powerful really love rigging stuff in their favor huh You say that like there's anybody that doesn't. The powerful just have more scope to actually do so.
- dopidopHN 4y ago
  That whole setup could use some free market love.
  - paxys 4y ago
    This is going to start happening to an extent now that there actually is a free market, after...whatever that last decade was.
    - flanflan 4y ago
      > now that there actually is a free market ???
    - Extropy_ 4y ago
      Please, excuse me. But, what?! I honestly cannot make out what you're trying to reference.
      - paxys 4y ago
        I'm referring to the money printer that hid most problems plaguing corporate America. Why would shareholders care about mismanagement when their shares were going up 10x regardless?
        fijiaarone 4y ago
        I think the ??? was about your use of the word “now”
        s1artibartfast 4y ago
        I think the ideas that the money in printer is broken. now when the tide goes out we will see who is not wearing any bathing suits
- ipaddr 4y ago
  You shouldn't be allowed to sit on multiple boards or as a CEO/VP in any company
  - deleted 4y ago
    [deleted]
- xwolfi 4y ago
  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. 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. Tesla is a model of bad governance, to the point the harshest sanction a regulator could levy against their chairman/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.
  - mijamo 4y ago
    Actually this isn't the whole truth. There is a substantial body of literature around the effect of merging both positions or not and it is not really conclusive in any direction. You mention Europe but for instance in France it has been a corporate tradition too have both merged and separation has statistically lead to a significant underperformance. FYI it is called the agency vs stewardship theories and currently it seems like a academically the stewardship is slightly favored.
- osigurdson 4y ago
  Unfortunately, no organizational structure exists which guarantees optimal outcomes. Everything depends on the actual individuals who occupy the roles. Such structures should ultimately be up to the shareholders.
  - lostlogin 4y ago
    > no organizational structure exists which guarantees optimal outcomes I like the structure of bee colonies. The queen controls the temperament, the workers control the queen and adjust the rate of growth or contraction. Periodically workers replace her with one her of daughters (via regicide). I'm not sure what the takeaway here is though, as I don't like the idea of a monarchy or of communism.
    - jollofricepeas 4y ago
      Hmm, how insightful. Let’s dig into this. - Queen stops producing workers and is replaced by workers (regicide) or replaced by beekeepers (ie. shareholders) - Bees due to disease or other calamity don’t provide enough honey for their shareholders and they lose their hive and possibly life more than likely I’d prefer not to lose my life if I don’t produce at work if workers or shareholders aren’t happy
      - kbenson 4y ago
        Kinda strange which parts you decided to view as metaphorical and transplant, such as shareholders, and which you decided we're integral to the idea and needed to stay, such as the death of hive members. I think there might actually be some interesting things to consider if a hive-like approach was used for a business, but I'm not sure your assessment really gets to the heart of it. In some ways, it's kind of like a co-op.
        headsoup 4y ago
        The really interesting part would be when winter hits and the Queen stops producing workers to downscale the hive (i.e. mass layoffs), then the insane period in spring where mass hiring starts... Certainly a fun idea to play with
- colordrops 4y ago
  Boards could have ICs that are voted in by fellow employees.
  - thedougd 4y ago
    Better have an air tight employment contract if you’re expected to speak up and keep the executive management honest.
wenus 4y ago
Wash?

bluefirebrand 4y ago

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. The powerful really love rigging stuff in their favor huh

taneq 4y ago
> The powerful really love rigging stuff in their favor huh You say that like there's anybody that doesn't. The powerful just have more scope to actually do so.
dopidopHN 4y ago
That whole setup could use some free market love.
- paxys 4y ago
  This is going to start happening to an extent now that there actually is a free market, after...whatever that last decade was.
  - flanflan 4y ago
    > now that there actually is a free market ???
  - Extropy_ 4y ago
    Please, excuse me. But, what?! I honestly cannot make out what you're trying to reference.
    - paxys 4y ago
      I'm referring to the money printer that hid most problems plaguing corporate America. Why would shareholders care about mismanagement when their shares were going up 10x regardless?
      - fijiaarone 4y ago
        I think the ??? was about your use of the word “now”
        s1artibartfast 4y ago
        I think the ideas that the money in printer is broken. now when the tide goes out we will see who is not wearing any bathing suits
ipaddr 4y ago
You shouldn't be allowed to sit on multiple boards or as a CEO/VP in any company
- deleted 4y ago
  [deleted]
xwolfi 4y ago
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. 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. Tesla is a model of bad governance, to the point the harshest sanction a regulator could levy against their chairman/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.
- mijamo 4y ago
  Actually this isn't the whole truth. There is a substantial body of literature around the effect of merging both positions or not and it is not really conclusive in any direction. You mention Europe but for instance in France it has been a corporate tradition too have both merged and separation has statistically lead to a significant underperformance. FYI it is called the agency vs stewardship theories and currently it seems like a academically the stewardship is slightly favored.
osigurdson 4y ago
Unfortunately, no organizational structure exists which guarantees optimal outcomes. Everything depends on the actual individuals who occupy the roles. Such structures should ultimately be up to the shareholders.
- lostlogin 4y ago
  > no organizational structure exists which guarantees optimal outcomes I like the structure of bee colonies. The queen controls the temperament, the workers control the queen and adjust the rate of growth or contraction. Periodically workers replace her with one her of daughters (via regicide). I'm not sure what the takeaway here is though, as I don't like the idea of a monarchy or of communism.
  - jollofricepeas 4y ago
    Hmm, how insightful. Let’s dig into this. - Queen stops producing workers and is replaced by workers (regicide) or replaced by beekeepers (ie. shareholders) - Bees due to disease or other calamity don’t provide enough honey for their shareholders and they lose their hive and possibly life more than likely I’d prefer not to lose my life if I don’t produce at work if workers or shareholders aren’t happy
    - kbenson 4y ago
      Kinda strange which parts you decided to view as metaphorical and transplant, such as shareholders, and which you decided we're integral to the idea and needed to stay, such as the death of hive members. I think there might actually be some interesting things to consider if a hive-like approach was used for a business, but I'm not sure your assessment really gets to the heart of it. In some ways, it's kind of like a co-op.
      - headsoup 4y ago
        The really interesting part would be when winter hits and the Queen stops producing workers to downscale the hive (i.e. mass layoffs), then the insane period in spring where mass hiring starts... Certainly a fun idea to play with
colordrops 4y ago
Boards could have ICs that are voted in by fellow employees.
- thedougd 4y ago
  Better have an air tight employment contract if you’re expected to speak up and keep the executive management honest.

wenus 4y ago

Wash?