SECTION 3. ACTION TO SELECT AND SAFEGUARD TALENT (A.S.S.E.T.)
WHEREAS healthy corporations are vital to the progress of the American state;
WHEREAS the Chief Executive Officer is the most vital individual in any corporate environment;
Therefore, the purpose of this section is to ensure that the position of CEO should rightly be restricted to those with adequate qualifications.
A society can be only as strong as its corporate leadership, and the recent increase in the numbers of unfit chief executive officers in this country is very worrying. We need to reverse this dangerous trend, and that's why we strongly support the congressional efforts to strengthen the qualifications for CEOs in our country.
We have seen a number of high-profile failures among CEOs in recent years. Carly Fiorina of Hewlett-Packard
At The Motley Fool, we stand up and take notice whenever a CEO becomes compelled to leave his or her post. Not only do we believe in holding stocks for the long term, but we also feel that CEOs should serve for the long term. An early departure from the corner office deeply saddens us. So we envision a day when CEOs serve for tenures usually associated with popes. To achieve that vision, we need to ensure that each chief executive officer meets certain minimum qualifications. That's why we support Section 3, the A.S.S.E.T. provision, of H.R. 401.
In medieval times, merchants, bakers, millers, and other professions had guilds that created and enforced a uniform set of regulations. By determining who would enter a profession, the guilds could prevent someone off the streets from becoming, for example, a baker just because he liked the smell of fresh-baked bread.
A modern parallel to the medieval guild is the highly regarded American Medical Association. Some of the medieval banking families, like the Medici family, might offer yet another useful model from which we can learn. In fact, we think we could learn a lot about running public companies by following a more medieval approach to leadership.
Fortunately, there's no need to set up an actual guild for CEOs, because we believe there is only one qualification that is necessary for any aspiring chief executive. And that qualification is this: To become a new CEO, one must have already been a CEO. This simple rule is all that is needed to rid us of the dangerous and unproductive phenomenon of short-tenure chief executives.
This rule would have saved us from Fiorina, Nardelli, and Pressler. All three had never been a CEO before taking up that role at their respective companies. Naturally, this rule would be very popular among the most important individuals in corporate America: chief executives themselves. A recent study from DUH Consulting notes that 97.4% of all American CEOs would like to see the profession limited in this way.
This new qualification will serve us very well for now. Over the long term, however, we would prefer a world in which the chief executive officer position became a hereditary one. For example, the next time Michael Dell wants to step down as CEO, he might consider one of his children for the post. And if his children aren't suitable, he might want to think about a strategic adoption. This approach worked quite well for the Roman emperors.
Like the guild system, the hereditary principle is a sound, old-fashioned idea that is well worth revisiting. In the meantime, we hope that you will join us in supporting this new qualification. It's time to strengthen the ranks of America's natural-born leaders.
Email us at [email protected] and join our crusade! We need your help to pass this valuable legislation.
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