GM CEO Mary Barra was handed the full set of the keys to the company - but is it a good idea?

07 Jan 2016

CEO Mary Barra this week was handed the full set of the keys to the company, and named chairman. Forbes Magazine just postet an article explaining, why this could be a terrible idea.

It's not the first time in GM's history that the company combines the jobs of a CEO and a chairman. There are periods in which the two positions have been separated-usually after something awful happens.

After GM imploded in 1992 under the brief leadership of Chairman/CEO Robert Stempel, former Procter & Gamble CEO John Smale, a GM board member, took over as non-executive chairman while Jack Smith was given the CEO job. Smith added the chairmanship in 1996. When G. Richard Wagoner Jr. took over as CEO in 2000, Smith remained chairman. Wagoner was given the title in 2003. Wagoner was especially ineffectual in leading the automaker, unable to reverse market share declines. President Obama ordered Wagoner replaced as a condition of the U.S. Treasury bailing our GM in 2009. After Daniel Akerson, who claims to be ignorant of the cover-up when he stepped down, turned over the company to Barra two years ago, the chairmanship he held did not go with it-until now.

While General Motors seems to be climbing back strong from its bankruptcy and ignition switch cover-up scandal, there is simply no good reason to consolidate the two jobs with one person. History shows that at most companies, but especially at GM, that it is only a matter of time before bad governance that comes from the chairman and CEO wearing the same hat delivers some kind of body blow to shareholders.

The last four combined chairman and CEOs hardly distinguished themselves in holding both roles. Akerson, an outsider from the telecommunications industry, presided over the ignition cover-up. Wagoner, holding both posts from 2003 to 2009, ran the company into a financial buzz-saw, a job that was finished by the economic crash of 2008. Smith, before that, presided over an epic market share decline and dumbing down of GM's products and brands at a time when the U.S. economy was actually humming in the mid and late 1990s. Robert Stempel had both jobs and was ousted after two years. Roger Smith before that held both jobs, and GM veterans attest that communication in the C-suite and among a rubber-stamp board was pathetic. It's a lousy track record for combing the jobs at GM.

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