Do CEOs Have a Shelf-Life?

ZA Confidential today looks at an issue which has reared up again following reports about the eventual retirement of Bidvest CEO Brian Joffe. Although he says he is not moving on just yet, he has given assurances that a succession plan is there for when the time does come. This has once again prompted discussion on whether or not CEOs have a shelf life. What do our experts think?

Bidvest CEO Brian Joffe:
I think that generally, yes, executives do have a limited shelf life in their job. But much of this depends on the circumstances. In some in instances, circumstances dictate that CEOs have a longer shelf life.

Company Director Brand Pretorius:
My view is that one should not generalize regarding a CEO’s so-called shelf-life. Many CEOs succeed in adapting very successfully to new circumstances and challenges. The prerequisites are to be strategically alert, adaptable and agile. Two critical success factors are whether they continue to enjoy the trust and confidence of all their stakeholders, and whether they deliver the required results. Should the CEO not deliver the expected results both in terms of the numbers and the principles and values, the erosion of stakeholder confidence will start. It is obviously then time to move on.

Outgoing FNB CEO Michael Jordaan:
The golden rule for CEOs: quit after ten years!

Chris Gilmour from Absa Investments:
Much depends on the type of company, how successful it is and what the shareholders and market think of the CEO. Provided the CEO is doing an excellent job, is in good health, has a company full of willing followers, then no time limit should apply. This is especially true of founder CEOs such as Brian Joffe of Bidvest and Stephen Kosseff of Investec. Of course, these are special, entrepreneurial people and replacing them with professional managers would be difficult. It can be done, however, notably in the cases of Sean Summers at Pick n Pay and Kevin Hedderwick at Famous Brands. Only when a CEO has demonstrated that he or she has reached the end of the line of terms of their ability to add meaningful value to an organisation should they be deemed to have reached their sell-by date. That determination can come in a variety of ways; if the share price reflects lack of confidence in a CEO or overall a lack of credibility in management or if the shareholders decide they have had enough. A decent CEO should be able to detect the warning signs and move on before value in the company is destroyed.

Nedbank CEO Mike Brown:
I think a CEO’s shelf-life is really determined by his/her ability to add value to the organisation – clearly different timelines for different people and circumstances. I think a good CEO will know when it is better for the organisation that they move on.

Nick Booth, CEO of Ceramic Industries:
My simple answer is yes. The leadership of CEOs demand an input of energy into the organisation on an ongoing basis. Once the energy levels start to flag over a sustained period of time it is time to go. The shelf-life will vary from individual to individual and also depend on the lifecycle stage in which the company finds itself. The shelf-life is therefore linked to the environment in which we operate, together with the management style of the individual CEO.

Liberty CEO Bruce Hemphill:
To put it bluntly, CEOs should move on when they start to believe their own BS! This probably starts to happen after about seven or eight years. One easy way to tell if it is happening is to check the honesty of the conversations that he or she has with their management team. If the management team can’t tell the CEO to go to hell when he’s talking rubbish, it’s time for him to go!

Comment:
It seems that opinion is pretty divided. Certainly, there seems to be an agreement that the signs will be there when a CEO is no longer adding value to the organisation, and the brightest of them should be able to read these and pack their bags.

Tweets of the Day:
Puns (@omgthatspunny): The short fortune-teller who escaped from prison was a small medium at large.
Julz Millar (@DONTJIMMYMEJULZ): I drink because it’s difficult to eat alcohol.

ZA Confidential is e-mailed to subscribers. For details on subscription rates, please contact zaconfidential@gmail.com

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