When a company is not performing well, as well as the board thinks about replacing the CEO, the first question is, "What sort of CEO do we need?" The answer is frequently the same: someone with plenty of expertise along with an established track record, but also, a highly magnetic figure. Do charismatic CEOs achieve better financial performance, which might warrant the higher personal settlement they command? Be careful what you wish for, say the authors, because you might get more than you bargained for: A CEO who exudes charm, but turns out to be a dud. While revealing that there may sometimes be a place for a magnetic CEO when the firm is managing in a more disruptive environment, generally speaking, boards and compensation committees would be well advised to see through the appeal offensive and stick with measuring company performance.
PUBLICATION DATE: December 15, 2010 PRODUCT #: IIR038-PDF-ENG
This is just an excerpt. This case is about LEADERSHIP & MANAGING PEOPLE
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