Jewish World Review Dec. 4, 2002 / 29 Kislev, 5763
A fast fix for corporate credibility?
http://www.jewishworldreview.com | The era of the celebrity CEO didn't end as well as we might have liked. Some of the CEOs who once graced the covers of business magazines now may face prison, such as Tyco's Dennis Kozlowski. Others are struggling to keep their once-high-flying firms from crashing. Still others, like GE's Jack Welch, have found their celebrity to be no shield when their personal misadventures are made public.
As the age of the egregiously overcompensated CEO-as-celebrity ebbs, we may be on the verge of an important variation on that failed theme: the celebrity-as-CEO or, for that matter, as chairman.
Why waste all that time and all those public relations dollars building a top executive into a cover boy or cover girl when a company can simply go out and buy the celebrity of its choice to take over the chairman's or CEO's office?
WorldCom may become the leader in the fast-fix fad. The firm faces thousands of angry shareholders who, combined, have lost billions of dollars, and WorldCom bondholders aren't doing too well, either. Now, a big bond investor wants to try to gain enough control to name former New York City mayor Rudy Giuliani as WorldCom chairman.
Imagine what a strategic coup it would be. Rudy is a household name and a Time magazine Person of the Year. Last year he made Gallup's annual list of most admired men and women, along with President Bush and the pope.
In fact, problem-plagued companies could use the most-admired list as the ultimate executive recruiting list. Granted, the survey includes a number of people unlikely to be looking for work, such as the president, Secretary of State Colin Powell and Sen. Hillary Rodham Clinton. But a number of others might well be lured into service. Newly named Nobel laureate Jimmy Carter could apply his ample experience solving international disputes to solve the problems at Enron. Former President Bill Clinton (yes, he's actually on the list) could take over at Tyco, something of a cultural fit.
Oprah Winfrey, who has spoken of retiring as a talk-show host, could use her media expertise to revive Vivendi or Disney, thereby solving the problem of who should succeed Michael Eisner. Former first lady Barbara Bush could probably front any company around. After all, this is a woman who has helped build a modern political dynasty for Republicans, and members of both parties love her.
And Julia Roberts and Madonna (yes, they're actually on the list, too) could co-chair Kmart. Imagine the retail-sales synergy. They could also launch their own clothing lines and still leave lots of room for Martha Stewart (not on the list).
The rushed effort to rebuild corporate reputations seems to be an echo from a bygone era. After the market crash of the past 2 1/2 years, you would think that even the clever people who would use Rudy to front for WorldCom might recall that reality does matter. The company is bankrupt. It has serious management issues and market conditions that would challenge even those with extensive corporate experience in telecommunications.
You'd also think these clever types would have learned that there's no such thing as a fast and easy fix. That's exactly how we ended up in this corporate-credibility crunch: Corporate executives played shell games, covered up losses, pumped up stock prices and all the while presented a false front to shareholders.
Rudy, a former prosecutor and elected official, knows the importance of public perception and its value. Media reports say that he could receive as much as a 5 percent stake, or $150 million, if WorldCom gets back on track. I hope Rudy doesn't take the job. He's achieved a standing in our society that is rare, and he deserves to be far more than a figurehead for a flawed strategy to restore confidence in Corporate America.
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