Magazine article Management Today

Lord High Executive

Magazine article Management Today

Lord High Executive

Article excerpt


It's amazing how quickly the phrase `chief executive' has gathered currency. Not so long ago in Britain, the boss of a major company was `managing director', and proud of it. In the US, somewhat longer ago, the shots were mostly called by the company's `president'. Then, presumably through the endeavours of the American management consultants from whom most newspeak flows, `chief executive officer' began its surge in popularity.

The process worked in parallel with another development -- the growing conviction that the supreme executive role was primarily strategic. Tactics, or operations, were a lower-order activity that could, and should, be left to staff on the next rung down. This strategic emphasis, at least in theory, removed the necessity to have a separate chairman who controlled neither strategy nor tactics. His role was to preside over a board whose own function was to see that, both strategically and tactically, the executive management did its stuff.

Today's theory, however, also holds the board responsible for strategic direction, which supposedly makes the chief strategist the obvious, if not the only, logical choice to take the chair. In the interests of pure research, I was therefore going to tabulate how many of America's top company CEOs, as listed in last year's Business Week executive compensation scoreboard, were also chairmen. Statistical effort proved unnecessary. Page after page is filled, not only with the legend `chmn & CEO', but in many cases (just to rub it in) with `chmn., pres. & CEO'. It might be better to plump for the title `supreme commander' and have done with it.

Funnily enough, this very title came in useful at Nike, the athletic shoe company, which became briefly famous for a free-form style of management that eschewed rank altogether. This posed psychological problems for a newly hired woman executive who, having struggled through a male-dominated jungle, wanted her success recognised in print. So the real Nike boss left the title to her: and `supreme commander' duly appeared on her visiting cards.

Western management is supposed to be moving in the Nike direction and away from the traditional British mode of one-man dictatorship, which is benevolent only if the company is lucky. For the supreme commander motif is substance, not mere form. After all, the overlord of one British company, Blue Arrow, seems, on his own initiative, to have authorised a 25 million [pounds] loan at a time when the group was plunged deep into trading troubles and personal controversy. You can't get much more substantial than that.

Across the Atlantic, F. Ross Johnson not only single-handedly put his company, RJR Nabisco, in play (with results that backfired on him personally): according to Fortune, he also pocketed, without the shareholders' knowledge, `restricted shares' which, on takeover, must have been worth $20 million. Was Johnson wholly innocent of the concealment of his riches? For that matter, was Roger Smith, chairman and CEO of General Motors, a mere bystander when the colossus made accountancy changes which, alone, enabled him to boast (time and again) of record earnings for 1988?

Since Smith rose by the accountancy route, that's hard to believe: especially when the changes accounted for an estimated, barely believable 36% of GM's profits. …

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