Authoritarian CEOs are out, inclusive CEOs are in

ENAR

CEOs today must work cooperatively with a variety of stakeholders, including proactive boards, involved investors and other vocal constituencies. There has been a dramatic shift over the past decade in the role of the CEO in corporations across the globe. The time of the “authoritarian” CEO, who roamed the corporate landscape not so long ago, has passed, as we enter the era of the “inclusive” chief executive officer. Whereas Authoritarian CEOs answered only to themselves, the power of today’s CEO is not as absolute: Boards of directors are becoming more critical and more closely involved in setting strategy, and are far more likely to insist that CEOs deliver acceptable shareholder returns and demonstrate ethical conduct. Boards are increasingly prepared to replace CEOs in anticipation of disappointing future performance, instead of merely as punishment for poor past performance. At the same time, large shareholders like private equity firms are taking a