There are many reasons to purchase a copy of the weekend edition of London’s Financial Times, but Simon Kuper‘s sublime column in the FT’s Weekend Magazine is indubitably one of the best. A recent article – the provocatively titled Why CEOs shouldn’t run the world (21st April 2012) – sees Kuper skilfully subvert the achingly fashionable notions that business constitutes ‘the real world’; that businesses are good metaphors for national governments; and that politicians should be guided by, or preferably be, figures from the domain of commerce.
Kuper makes a number of highly astute points, including the wonderful illustration of how the contemporary trend of idolising businessmen is merely the latest manifestation of the historical fetishisation of different occupational classes (clergymen, military personnel) in the context of statecraft. But we at Mediolana feel that his brilliant argument may have one fundamental weakness: the idea that ‘a CEO typically only has one target: to make a profit. A president has many targets.’
Once in the not so distant past this may have been a reasonably accurate assessment of the function of the CEO, and in a sense it still is: company heads are to some degree defined by the red ink (or absence thereof) on the balance sheet. However – and perhaps ironically at least partly as a result of the ever-intensifying cult of the business executive – the role of top-tier staff at corporations is increasingly disconnected from their actual performance. One cannot explain the financial collapse of 2007 to date through the prism of the rationally assessed CEO. Too many company leaders, particularly though by no means exclusively in the banking sector, have led their corporations (and, via the now ubiquitous bailouts, countries) off the cliff of fiscal abyss, let they have remained in handsomely-remunerated positions of command.
Additionally, the demands of the media and the burgeoning ethical demands on economic entities in an era where CEOs are becoming synonymous with their efforts (or lack of them) in the field of CSR – corporate social responsibility – mean that, conversely, the post of CEO is in danger of becoming politicised at least as much as political leadership is becoming corporatised.
In fact, we would contend that at the highest levels, the worlds of business and politics are intertwining, with each borrowing elements from the other. Both CEOs and heads of state alike enjoy the ability to deploy armies of functionaries which they only have the faintest perceived financial responsibility towards; both benefit from extraordinary privileges, not least easy debt and the ability to default without almost any personal financial consequences, that are solely the province of government and large corporations. The real CEO fallacy might not be that they are paradigms for political leaders, but that, in many cases, both are viable models at all.