Our corporate dilemma

I am fortunate to be on the Board of Directors of a very successful corporation.  We hired a new CEO a few years ago to turn our company around from the results of poor management by the previous CEO.  He has done so.  He had been a successful manager most of his life, although in a separate industry, so we took a chance and hired him.  He took stock of what was wrong and what was right with our company, which he had admired for many years, and went on from there.  As a result, we have been able to recall workers and give raises to our workers, and manufacturing and sales are booming.  Earnings are up.  We are successful again.

Our CEO has also been successful in negotiating beneficial contracts with our vendors and suppliers.  Efficiency has been increased by reviewing our rules and regulations and eliminating those that served no valid corporate purpose yet maintained appropriate levels of safety.  Our company has come back from the brink and is now once again considered to be one of the best in our field.

Despite all this, we now face something of a dilemma.  We have a set of bylaws that allow for a review of our management team every four years.  This review is done by our unusually high number of shareholders.  Our bylaws further provide that each of our fifty directors must come from all fifty states, so as to be fairly representative of and responsive to our nationwide market.  Our directors are elected by the shareholders from the state, represented by that particular director.  The directors then vote for the CEO with a majority prevailing.  A CEO may serve for only a maximum of eight years.

Next year's review will be an odd one.  Our shareholders and ultimately our directors will have to decide between two job applicants for the position of CEO.  On the one hand, we can rehire our current employee/CEO, who has proven his ability to revive our company's fortunes and who has a vision to make our company even stronger going forward.

The other job applicant, on the other hand, has presented to us quite another strategy.  This second applicant proposes fundamentally changing our company's direction and goals, based on the applicant's promise that things would eventually be better.  The costs of this fundamental transformation will exceed any budget this company has ever seen.  This is to be financed, in part, by charging our most successful and best customers much higher prices.  We are assured that these customers will not mind this and will even welcome it.  To make a happier workforce, this applicant proposes untold benefits for our workforce, to be partially paid for by cutting management salaries.  The professed purpose is to provide a workforce loyal to the new CEO and his goals.  As it turns out, the proposed plan has been tried in several competitors with no success and even colossal failures.  Nonetheless, many of our shareholders, which include many of our workers, are intrigued by the idea of better benefits at another's expense.

Keeping in mind that we have a duty to look out for our shareholders' interests by providing the most successful company we can, we are therefore faced with a commonsense yet major decision.  Do we rehire a CEO whose experience has proven very beneficial to our company and who has a vision for even greater things to come, or do we hire a new job applicant whose visions essentially require a reorganization of the company, much like a Chapter 11 bankruptcy, and may even lead to bankruptcy?

Is our 2020 presidential election really at all different?

I am fortunate to be on the Board of Directors of a very successful corporation.  We hired a new CEO a few years ago to turn our company around from the results of poor management by the previous CEO.  He has done so.  He had been a successful manager most of his life, although in a separate industry, so we took a chance and hired him.  He took stock of what was wrong and what was right with our company, which he had admired for many years, and went on from there.  As a result, we have been able to recall workers and give raises to our workers, and manufacturing and sales are booming.  Earnings are up.  We are successful again.

Our CEO has also been successful in negotiating beneficial contracts with our vendors and suppliers.  Efficiency has been increased by reviewing our rules and regulations and eliminating those that served no valid corporate purpose yet maintained appropriate levels of safety.  Our company has come back from the brink and is now once again considered to be one of the best in our field.

Despite all this, we now face something of a dilemma.  We have a set of bylaws that allow for a review of our management team every four years.  This review is done by our unusually high number of shareholders.  Our bylaws further provide that each of our fifty directors must come from all fifty states, so as to be fairly representative of and responsive to our nationwide market.  Our directors are elected by the shareholders from the state, represented by that particular director.  The directors then vote for the CEO with a majority prevailing.  A CEO may serve for only a maximum of eight years.

Next year's review will be an odd one.  Our shareholders and ultimately our directors will have to decide between two job applicants for the position of CEO.  On the one hand, we can rehire our current employee/CEO, who has proven his ability to revive our company's fortunes and who has a vision to make our company even stronger going forward.

The other job applicant, on the other hand, has presented to us quite another strategy.  This second applicant proposes fundamentally changing our company's direction and goals, based on the applicant's promise that things would eventually be better.  The costs of this fundamental transformation will exceed any budget this company has ever seen.  This is to be financed, in part, by charging our most successful and best customers much higher prices.  We are assured that these customers will not mind this and will even welcome it.  To make a happier workforce, this applicant proposes untold benefits for our workforce, to be partially paid for by cutting management salaries.  The professed purpose is to provide a workforce loyal to the new CEO and his goals.  As it turns out, the proposed plan has been tried in several competitors with no success and even colossal failures.  Nonetheless, many of our shareholders, which include many of our workers, are intrigued by the idea of better benefits at another's expense.

Keeping in mind that we have a duty to look out for our shareholders' interests by providing the most successful company we can, we are therefore faced with a commonsense yet major decision.  Do we rehire a CEO whose experience has proven very beneficial to our company and who has a vision for even greater things to come, or do we hire a new job applicant whose visions essentially require a reorganization of the company, much like a Chapter 11 bankruptcy, and may even lead to bankruptcy?

Is our 2020 presidential election really at all different?