While firms with charismatic CEOs often enjoy an advantage in communicating their message to their target audience, they are also subject to a unique set of challenges, as chronicled by Professor Bruce Kogut in a recent post about leadership in social enterprise.
When Apple CEO Steve Jobs recently announced that he’d be taking a leave of absence until the end of June to address his health concerns, investors panicked and initiated a wave of selling that sent the stock down 10% within minutes of the news.
Now, despite the company posting better than expected first quarter results, some are expressing doubt about Apple’s long-term outlook. As Slate’s Farhad Manjoo asked in a recent article, “What happens to a cult without a leader?”
Apple’s milieu raises several important questions about leadership and corporate governance issues that all successful firms must address. Here are just a few:
How integral is a CEO to a company’s success? Should firms work to dispel the idea that one individual can play such a large role in the company’s business?
By allowing senior leadership to personify the company’s message, is it in effect diluting its brand in the long term?
How necessary is it for companies to develop transparent leadership succession plans?
Should firms be wary of creating celebrity CEOs that become too closely associated with their brand?
What obligation do publicly traded companies have to disclose the health of its senior leadership to its shareholders?
Have an opinion on any of these issues? Let us hear it.
Photo credit: acaben
Comments
In my opinion the cult of personality develops in cases of extreme success or extreme failures. And as it goes, the celebration of success is more appealing and hence the cult of personality. The question becomes, is the combined rational of multiple individuals that results in a mass following of sorts, good or bad for the company. WEll, who will argue to a stock price going up, but it is the investor bail out that needs an escape goat to blame. In the long run it doesn't matter. The investors and the analysts will always find a way to justify their actions and statements, and the stock price will bounce its way to equilibrium. In its hay days Microsoft stock was also quiet tied to Bill Gates, but does it matter now?
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