A company’s chief executive officer is rarely standing alone at the helm, often relying on an array of other senior executives and employees to help get things done and organise the business.
Why then, are chief executives often pushed into the public spotlight alone, with the full weight of the company’s decisions and choices placed solely upon their shoulders?
This notion of “the cult of the CEO” needs to be dispelled, according to Ab Banerjee, chief executive and founder of ViewsHub, who highlights the direct negative affect the concept of the “all-powerful leader” can have on chief executives.
“Think of a prominent global-company CEO. Sir Martin Sorrell? Indra Nooyi? Elon Musk?” wrote Banerjee for Management Today.
“Now, name the CFO and CMO. I bet you can’t.”
Banerjee blames both internal company cultures and unrelenting media attention for the perpetuation of the “cult”, saying companies have “bought into the myth that CEOs stand alone at the top — rarely acknowledging the role played by the management team”.
Attitude can hurt companies financially and leaders personally
Noting the issue is “rapidly getting worse”, Banerjee says this mentality can have a negative impact on a company’s financial position, as well as the chief executive’s mental health.
“The relentless pressure to be all-seeing and all-knowing, to be overtly visible and proactive both within and outside the company, often leads to unmanageable stress and enormous workloads,” he says.
“Company CEOs are often held accountable for poor company performance caused by things completely outside their control, such as market volatility. So alongside the stress of running a multinational organisation, they know that their head is on the chopping block if something happens that they were powerless to stop.”
As a result of this, Banerjee says it is not surprising that research from Apollo Life found all chief executives report issues with stress, and one in four claim to have insomnia.
And if the risk of adverse mental health problems wasn’t enough, Banerjee also highlights the financial risks for companies that are reliant on one person, noting that when LifeWay Foods chief executive Michael Smolyansky died suddenly, the company’s value dropped by 11.7%.
“The ‘cult of the CEO’ also puts financial performance in jeopardy. When a company is so tightly tied to the leadership of a single individual, the market cap of the company relies on them staying in place,” he says.
The solution? More communication
Banerjee believes the best way to tackle the issue and do away with the cult of the chief executive is to increase the visibility of company management teams, even just by doing little things such as replacing the chief executives photo in annual reports with a photo of the executive team, or spreading public engagements amongst the senior management.
“This is something companies need to do further down their organisations too, refocusing attention away from A-star performers to team contributions,” he says.
“Just like highlighting the contributions of the management team, this spreads the workload and recognises the reality that success and failure is, more often than not, a result of teamwork.”
“We need to tear down the cult of the CEO. If we’re successful, not only will companies benefit. Not only will investors benefit. But CEOs will too.”