The Celebrity Executive Officer
What are the leadership skills and attributes you need to sit in the big chair at the very top of an organisation? How should you spend your time?
We’ve seen a multitude of gaffes, scandals and bloated bonuses from CEOs in the UK and, as a recent PWC report revealed, for the first time, more chief executives were dismissed for “ethical lapses” than for poor financial performance or board-level disputes.
Here CEO Today hears from Sam Gilpin, managing director and head of YSC Europe, on the celebritisation of CEOs.
If we were to look at a job description for a CEO position, we’d see responsibilities and priorities including developing high-quality business strategies, ensuring continued growth and profitability through effective execution, serving as the primary contact between the board and senior team, and, in many cases, being the public face of the company.
Whilst CEOs still have to wear multiple hats to be successful, over the past few years there has been a rebalancing of the importance of these various job aspects. Revenue growth and profitability will still factor heavily in determining bonuses, for instance, but public perception of the CEO – particularly negative – is carrying greater weight than ever before.
The “ethical lapses” of the CEO
You won’t have to look hard to find news of a CEO’s fall from grace after a scandal or alleged misconduct. In fact, a recent PWC report revealed that 2018 was the first year in which more chief executives from the world’s 2,500 largest publicly-listed companies were dismissed for misconduct than for poor financial performance or board-level disputes. In almost 39 percent of these cases, “ethical lapses” were the drivers behind an involuntary exit, whilst poor financial results trailed at 35 percent. For additional context, in 2009, only 9 percent of CEOs were forced out due to ethical lapses.
These figures imply that multiple strands are coming together to create a situation where the actions of a CEO are being more closely monitored than ever before.
For example, social justice campaigns—the most well-known in recent years being the #MeToo movement—have shone a much-needed light on misconduct and injustice in society at large and the business world.
Questions and suspicion around how big tech companies are using, protecting and profiting from their customers’ data are also at the fore. Essentially, we’re in an environment where the public is suspicious of the people and companies with power, and we’re ultimately in need of more assurances that this power is not being abused.
The role of social
A common thread here is the role of social media. Greater scrutiny of executive leadership is coming alongside a time where the public has greater access to leaders now more than ever before.
Traditionally, the media would get privileged access to the Musks, Zuckerbergs, Bransons, Murdochs and Cooks of this world, and their interpretations would then be digested by us, the public. Now, these business leaders can engage directly with us in two-way conversations.
This is a double-edged sword for a CEO—the ability to get their message across to a relevant, interested audience without media filtration is certainly valuable. That said, a misplaced, insensitive comment or perceived slight straight from the horse’s mouth can and will spread quickly, in an uncontrolled way and with embellishment, through the social media grapevine.
Cultivating a positive public persona
As such, the importance of the CEO as the face of the business, both internally and externally, has never been greater. Many CEOs are taking the opportunity to cultivate a positive public image, knowing that its importance now rivals the more traditional areas of focus for the role.
A recent example that appeared throughout the media was that of the new CEO of cybersecurity company Avast. Ondrej Vlcek, who stepped into the CEO position in July of this year, made a powerful public declaration in his first day in the job: to waive his salary and bonuses and donate the funds to charity. In the media, reports of Vlcek’s decision focused largely on this being a signal to investors that he was confident in the company’s value-creation strategy, given that he himself is an equity holder in the firm.
However, I believe these reports largely overlooked the two key angles as laid out above: 1) the message that this sent to his employees, and 2) the image this presented to the public.
Although Vlcek held various senior positions at the company before taking the CEO role, making this charitable move his first internal and external declaration, voiced to his employees that this would be a new direction for the company. To the external casual onlooker, the gesture painted him as a CEO who cared.
This is not to downplay Vlcek’s charitable act, and the decision he made was no doubt spurred on by many other factors, both personal and professional. However, in terms of a taking responsibility as the new face of a business, it was a keenly intelligent move.
What does this mean for the CEO role?
Creating a positive image as the face of a brand is one thing, maintaining it is another. The public memory is shorter than it’s ever been, and one action does not create a lasting legacy of goodwill.
The CEO needs to think and act like a successful celebrity: maintaining poise under a constant spotlight, conveying a consistent and attractive set of personal attributes, sensing and avoiding brand-damaging trouble, and steering the narrative without obviously being seen to do so.
If the CEO is to become the face of a company, that is pretty much a fulltime job. The celebritisation of the CEO will have a ripple effect across the C-suite, meaning that many of the traditional aspects of the CEO role will need to be picked up by the senior team.
So, paradoxically perhaps, the CEO will be held to even greater account for the company’s actions, behaviours, outcomes and results, while having less direct control over them. Such is the price of fame.