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Friday, May 15, 2009

News Article Comments : Gerry Price blog: pubco report could cause years of turmoil

http://www.morningadvertiser.co.uk/news.ma/ViewArticle?R=83056

Following the BEC report's publication an Italian friend, someone whose opinion I very much respect, asked me: "Why are the CEOs of these companies not offering their resignation? Is it not tradition in this country for the head of a company to stand down when it has been proven that their activities have weakened the company or brought it into disrepute?"

I struggled to find an answer. How do you stand down from a personal feifdom came into mind though.


"Regrettably they only have themselves to blame" Now that is an interesting point Mr Price, which has not escaped many people except the ones properly respsonsible for the whole bag of murk the Inquiry exposes i.e. the pubco bosses.

In a discussion about the BEC report an Italian friend, someone whose opinion I very much respect, asked me: "Why are the CEOs of these companies not offering their resignation? Is it not tradition in this country for the head of a company to stand down when it has been proven that their activities have weakened the company or brought it into disrepute?"

I struggled to find an adequate answer. How do you stand down from a personal feifdom came into mind - when a company is, to all intents and purposes, a total manifestation of the personality of its CEO what happens to the company if they do the right thing and resign? Will anyone else be able to take over and carry on business as usual?

No. But then here, clearly there is no case to support the notion that these companies should, ought or even could carry on business as usual is there? So clearly there are strong grounds for the boards to be demanding the heads of the CEOs to be replaced by people more capable of taking the companies forward into a new business environment that does not depend entirely on stratospheric, eye popping, levels of debt which can be serviced only by sucking profit out of every nook and cranny of the organisation without ever reinvesting anything substantial for its long term survival. Selling the family silver is the old analogy.

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