“There comes a time in every man’s life when he must make way for an older man.” Those parting words – scornfully delivered by a sacked member of the British shadow cabinet in the 1970s – must have been ringing in the ears of at least three ousted European CEOs in recent weeks. Jean-Marie Messier of Vivendi Universal, Ron Sommer of Deutsche Telekom and Thomas Middelhof of Bertelsmann will not be the last rock-star CEOs to go, but all three have been replaced by their seniors: Messier by former Rhône-Poulenc head Jean-Rene Fourtou (aged 63); Sommer by Deutsche Telekom management and supervisory board veteran Helmut Sihler (72); and Middelhof by Bertelsmann stalwart Gunter Thielen (59).
Are we to celebrate the return of the greybeards, wise heads and safe hands to a world where recently youth and ambition have often seemed to count for more than age and experience? Or should we be asking whether corporates are in danger of losing their collective sanity when the stewardship of Europe’s largest telecom reverts to a man who last held the job in 1992 when he reached compulsory retirement age?
None of these stand-ins is likely to be there more than a few months – assuming that Vivendi, DT and Bertelsmann can find successors brave enough to risk the scorn that being a CEO now attracts.
Retribution is in the air. Just ask Deutsche Bank’s Josef Ackermann. He and others who were on the Mannesmann supervisory board at the time of its takeover by Vodafone, which earned billions for shareholders at the top of the market, are now facing breach of trust charges from the Dusseldorf state prosecutor’s office for agreeing a e30 million pay-off for Mannesmann CEO Klaus Esser.
CEOs with vision are especially reviled. At a time when greed for earnings has been replaced by fear of capital loss, the message from shareholders, lenders and independent board members is clear: safety first.
The cult of personality is over. Investors have had enough of ego-fuelled acquisitions, promises that can’t be kept, and relationships with bankers and analysts that outweigh those with shareholders.
What is needed now, it is reasoned, are people who have seen business cycles before, realize that shareholders come first, and will not have risky strategic visions.
Never mind that technology change is so rapid – and competitive pressures so fierce – that strategies can soon become outdated.
A safe pair of hands is the order of the day. The older, the better. But for how long?
