When the global economy is presenting daily gloom and doom, issues like the structure of boardroom power seem less urgent. But business as usual will be resumed one day. The questions raised by Stuart Rose’s desire to be both executive chairman and CEO at the British retail giant Marks & Spencer (M&S) would persist even without the recent poor results that have weakened his defenses against angry investors.
The ins and outs of this rumpus are symptomatic of deeper developments in top management. Once, Rose-style one-man bands were the norm. Today, his move flouts majority opinion among Britons who care about corporate governance. It’s mostly a phoney war, of course. Many CEOs blessed (or cursed) with chairmen still dominate management internally.
In the great crunch, the cult of the CEO survives, even though the allied cult of shareholder value has been well and truly rubbished by the bear market. Banks as well as shareholders are licking the wounds created by the latest lunacies; money overlords who once financed governments may now depend, like Barclays bank, on the huge wealth of “sovereign funds.” The future of many deals is stuck today in the hands of “private equity.” The public company is being partly eclipsed by good old private ownership.
Compared with the CEO cult, privacy is more compatible with the New Management as practiced by the digital entrepreneurs. Their freestyle methods and success provide a template for an era in which the CEO is just one of the boys, or girls. These heretics don’t rush into recessionary cost-cutting, even in gathering gloom.
The ideal 21st century company generates ideas as readily as breath, bottom-up rather than top-down. The ideas will be devised, designed, disseminated, perfected and developed in never-ending, rapid cycles dominated by customer needs. Recognition, promotion and rewards will be dominated by achievement as seniority is kicked out of the window.
Alas, this transformation hasn’t occurred widely, though many non-digital CEOs have suffered from falling behind the pace of change; their own job tenures have shortened as open criticism of their performance (see Rose) has risen. Moreover, the search for short-term gains, so long despised by professional managers, is the driving force of private equity — the new capitalism.
Under the name of “venture capital,” the original privateers made key contributions to the New Management. As relative midgets, the venturers sought out guys with good ideas, fed them with moderate borrowings and supported technological strengths with imported managerial talent. Without the combination of idea-rich technology and able managers, miracles like Apple, Digital and Intel couldn’t have happened.
Apple outlived growing pains to spawn massive wealth: on Fortune’s latest reckoning, Steve Jobs and his cohorts lead the world in “power and innovation.” The top 25 powerhouses, however, include a non-digital trio: GE, Procter & Gamble and Boeing, whose leaders (Jeff Immelt, A.G. Lafley and James McNerney) aren’t personally noted as innovators.
Their companies were lauded as management champions half a century ago. GE’s stability and strength contrast with the disappearance in Britain of its arguable equivalent, GEC. Yet UK engineering can still produce as many as 109 candidates for the annual MX Awards given by the Institution of Mechanical Engineers. The overall MX winner is Wrightbus, the Northern Irish enterprise whose diesel buses give it the European lead. The founder, William Wright, is still on the board at 83.
That may sound old-fashioned; but the partnership mode of the hedge funds and the highly personalized leadership of Silicon Valley reflect qualities long attributed to the “family-owned and family-managed” business. In the days when M&S had uniquely grand managerial and business kudos, that is how its boardroom was seen. And, if the glories are to return to Rose’s public company, the lasting private virtues, as everywhere, have a crucial part to play.
EXPRESSING GRATITUDE: Without its Taiwanese partners which are ‘working around the clock,’ Nvidia could not meet AI demand, CEO Jensen Huang said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and US-based artificial intelligence (AI) chip designer Nvidia Corp have partnered with each other on silicon photonics development, Nvidia founder and CEO Jensen Huang (黃仁勳) said. Speaking with reporters after he met with TSMC chairman C.C. Wei (魏哲家) in Taipei on Friday, Huang said his company was working with the world’s largest contract chipmaker on silicon photonics, but admitted it was unlikely for the cooperation to yield results any time soon, and both sides would need several years to achieve concrete outcomes. To have a stake in the silicon photonics supply chain, TSMC and
‘DETERRENT’: US national security adviser-designate Mike Waltz said that he wants to speed up deliveries of weapons purchased by Taiwan to deter threats from China US president-elect Donald Trump’s nominee for US secretary of defense, Pete Hegseth, affirmed his commitment to peace in the Taiwan Strait during his confirmation hearing in Washington on Tuesday. Hegseth called China “the most comprehensive and serious challenge to US national security” and said that he would aim to limit Beijing’s expansion in the Indo-Pacific region, Voice of America reported. He would also adhere to long-standing policies to prevent miscalculations, Hegseth added. The US Senate Armed Services Committee hearing was the first for a nominee of Trump’s incoming Cabinet, and questions mostly focused on whether he was fit for the
IDENTITY: Compared with other platforms, TikTok’s algorithm pushes a ‘disproportionately high ratio’ of pro-China content, a study has found Young Taiwanese are increasingly consuming Chinese content on TikTok, which is changing their views on identity and making them less resistant toward China, researchers and politicians were cited as saying by foreign media. Asked to suggest the best survival strategy for a small country facing a powerful neighbor, students at National Chia-Yi Girls’ Senior High School said “Taiwan must do everything to avoid provoking China into attacking it,” the Financial Times wrote on Friday. Young Taiwanese between the ages of 20 and 24 in the past were the group who most strongly espoused a Taiwanese identity, but that is no longer
A magnitude 6.4 earthquake and several aftershocks battered southern Taiwan early this morning, causing houses and roads to collapse and leaving dozens injured and 50 people isolated in their village. A total of 26 people were reported injured and sent to hospitals due to the earthquake as of late this morning, according to the latest Ministry of Health and Welfare figures. In Sising Village (西興) of Chiayi County's Dapu Township (大埔), the location of the quake's epicenter, severe damage was seen and roads entering the village were blocked, isolating about 50 villagers. Another eight people who were originally trapped inside buildings in Tainan
RSS