While I agree that U.S. boards of directors seem ever more willing to drop the trap door under their CEOs, firing the chief is only the tip of the governance iceberg ("The CEO Trap," Cover Story, Dec. 11). For every such CEO mutiny launched by impatient boards, there are a dozen cases of boardroom insubordination, such as the thumbs-down that Coca-Cola Co.'s board gave CEO Douglas N. Daft's plan to acquire Quaker Oats Co. in November.
While such activism shows a newfound board seriousness on shareholder value, the long-term consequences are very uncertain. When a CEO is ousted, the analysts, investors, and other corporations can at least assume that the new leader will have the final say for the company. But when CEOs are increasingly second-guessed by their directors, have we replaced the imperial CEO with imperial boards?
Ralph D. Ward
Publisher, Boardroom INSIDER
Some corporate boards have overlooked two developments that should drastically alter the role and expectations of the 21st century CEO: teamwork and knowledge creation. Teamwork has become the driver of most successful companies today, for we realize the benefits of collaboration. It is odd that this focus on teamwork has not been extended to the CEO's office. Why are teams crucial to the success of individual projects, yet we charge a single person with running the entire company? Wouldn't it make more sense to have a true team running the organization?
Also, the key to many companies' value today is knowledge creation. But the last thing the experts who are creating knowledge need is a powerful superhero CEO telling them what to do. Instead, the CEO office should facilitate the work of the experts and stay out of the way as much as possible. Until more boards focus on these issues, CEOs will continue to get too much credit when things are good and too much blame when they are bad.
Dana R. Hermanson
Corporate Governance Center
Kennesaw State University