Star CEOs can be great for the company image, in turn driving up shareholder value and boosting its talent recruitment efforts. However, there may even be perils as exposed recently from cases at Tesla, Papa John’s and CBS. To balance this, directors need to appoint strong independent directors to counter any such excesses. These independent directors must meet periodically over executive sessions, but not in the presence of the said CEO. As some CEOs, especially the star ones often show traces of narcissism, these directors need to be vigilant to the ego surfacing up. These star CEOs have been known to pay greater heed to advice from other stars rather than those merely experts. So other star CEOs from other companies could be inducted in to the board as their views are more likely to be followed than that of expert directors. The CEO must never be made such a big star so that he/she may even threaten to quit and the board is then at their mercy. Sometimes in order to truly execute the director’s role, one may even need to tweak the CEO’s role to that of chief visionary or chief strategy officer.

Source:https://hbr.org/2018/10/the-promise-and-peril-of-a-star-ceo

Uploaded Date:31st  October 2018