Imagine you’re a former CEO who transitions into private equity after leading a major company into decline. You piled on debt through acquisitions at a time when the company needed to streamline and cut costs. Although you eventually implemented cost-cutting measures in reaction to mounting losses, these actions came only when there was no real alternative.
From Crisis to Boardroom
Fast forward a few years. You’re still active in private equity, leveraging your network for new deals. Then, a prominent company from your home country approaches you to join their board. A few years later, you’re elevated to Chairman, tasked with restoring stability after a major proxy fight shakes the organization.
Jacques Nasser, often known as “Jac the Knife,” must be feeling quite pleased with his career at this point. The Australian mining conglomerate BHP Billiton has recently selected the former Ford CEO to help navigate its future path. BHP Billiton’s announcement on this appointment has sparked considerable debate.
Divergent Perspectives on Leadership
Opinions vary regarding these types of appointments:
Critics argue that it is a clear case of “failing upward,” where executives avoid accountability by moving to new roles.
Supporters may simply consider it “business as usual.”
Optimists even label such leaders as “eminently qualified” and “great leaders,” akin to the recent praise Cerberus offered for Bob Nardelli following his appointment after Chrysler’s bankruptcy.
A Troubling Cycle
This revolving door of leadership appointments is an insidious trend that demands attention. The notion that a failed CEO from one major company can seamlessly transition to serve as Chairman of another raises serious concerns about accountability and governance. In a perfect scenario, no executive who has led a company into decline should be allowed to assume such a critical role elsewhere—plain and simple.
Behind the Scenes
According to the New York Times, BHP Billiton consulted with Heidrick & Struggles during the selection process for Nasser. Additionally, they utilized a secret ballot among board members with the assistance of KPMG to confirm their decision.
At this rate, it appears that board decisions might soon resemble a game of “duck, duck, goose” when it comes to ratifying these appointments.