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Paul R. Portney
Dean/Scholar

Paul R. Portney

Paul R. Portney is Dean of the Eller College of Management at the University of Arizona, where he also holds the Halle Chair in Leadership.

Simple Fairness

There may be cases where lopping off the head of the tallest poppy may not be the best way to signal and initiate major change in an organization. But for two reasons, it's the most obvious and often the most appropriate way.

First off, under the corporate compensation culture of the last 10 or 15 years, when things go even moderately well it has been a handful of people at the very top of the company--and especially the CEO--who has benefited the most. In fact, far too much, in most cases. Simple fairness requires, then, that when things go wrong, the responsibility ought to be borne by that same group of people. And again, the CEO ought to head that list.

Second, using the old adage from sports that it's easier to change the coach than to fire the whole team, changing the CEO is in some ways the most economical change that's available to a board of directors. This also applies to the president of the United States when he decides that, in addition to everything else he has to worry about, it's his responsibility to manage the affairs of the nation's large companies, too.

Firing the head of an organization that's gone off the rails may sometimes be a mistake. More often than not, though, it's the most visible, obvious and appropriate response.

By Paul R. Portney

 |  March 31, 2009; 2:58 PM ET
Category:  Economic crisis Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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The BOD is accountable. This ought to bring in a new era of awareness and accountability of Boards – but probably not. CEO resigning is convenient and expedient – but the BOD remains. Political expedience – corporate of government – doesn’t fix or address either the immediate cause or the root cause of what’s gone wrong here.

Posted by: joeschmid | April 1, 2009 10:21 AM
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