There’s absolutely nothing that a corporate board of directors would rather face than replacing their CEO. Except, perhaps, having their significant other find them in bed with their girl or boyfriend. But when the profits, or more importantly the stock price starts tumbling, it’s time for the board to do what it does best: nothing.
Only after years of a really pathetic performance—like Jeff Immelt’s eight-year reign at GE, where the stock plunged from 39 to 15—might a board finally find the courage to act.
Or else, it too might face the ax.
A board revolution typically begins with some grumbles, then a phone call or two, leading to a past chairman calling the chairman of an elite headhunter, say Korn Flakes International.
Then follows the strict code of the American business warrior. Profanity, golf plans, complaints about the “Idiots in Washington” and confirmation of the golf date.
On the third tee, the past chairman broaches the issue.
“Harry, this is strictly between us. No associates. No paper. No leaks. I want names. We’ll pay your full fee but we’ll do all the negotiations.”
“So, Jake, you’re going to fire El Stupido. But get in line. You’re my third this week. Boy, do I love this Double Dip recession!”
“Yeah, I know. Good for you, bad for me. But Global Integrated has big problems and we need a CEO with balls and vision. Someone who can turn this $160 billion battleship around.
“I mean, our guy is good with numbers, but he’s just not a leader. We need someone like Jack Welch or, better yet, Oracle’s Larry Ellison. He’s got to be hungry. Someone with street smarts.”
“Jake, you’re in luck. I just signed two guys who have been out of the game for a while but are ready to jump back in. And I’m giving you first crack: Jeff Skilling or Conrad Black!
“The Supreme Court just overturned their convictions and they’re ready to rock ‘n roll.”
“Harry, have they made pot legal in Manhattan yet or are you pulling my leg? The way I read the papers, only part of their convictions were reversed and the rest of the counts were returned to the lower court. Those two will be on trial for the next two hundred years.
“Besides, forgetting any public and stockholders’ outrage, can you imagine me inviting either of them to Augusta National or Cypress Point?”
“Seriously, who else you got in your stable?”
“Believe it or not, Ted Turner wants back in the game. He’s an innovator. A maverick. A charismatic leader. Just don’t take him to meetings. He never goes anywhere without his travel pack of buffalos.”
“Harry, remind me not to call you again.”
“Jake. Not too fast. Have I ever failed? Ever?”
“O.K. seriously, I have your man. Gen. Stanley A. McChrystal.
”In case, you hadn’t noticed, he’s looking for a job. And he knows how to get the troops to follow his vision. Further, his army uses half your products from jet engines to all that secret shit.”
A week later, the past chairman and the headhunter talk again.
“So Jake, how did the meeting go?”
“Frankly, Harry, not so good.
“What was it? The money? The title? What the hell went wrong?”
“We agreed on a $20 million base and great stock options. And changed his title from CEO to Supreme Commander.
“He also insisted on absolutely no media contacts, ever, including our in-house staff.
“Frankly, I could have lived with all that, except this morning I read in the New York Times where he called our board a bunch of pussies for not firing our current CEO three years earlier.”
Bill Regardie was the founder and publisher of Regardie’s Magazine.