Top executives are less powerful—and more like the hero of “Gulliver’s Travels”—than they used to be. Two decades ago, American CEOs struck heroic poses on the covers of business magazines and appointed buddies to their boards.
Since the Enron debacle in 2001, change has come in several ways:
- Chief executives don’t last as long. Tenure has dropped from 8.1 years in 2000 to 6.6 years today.
- Fewer chiefs chair their own boards.
- Scandals have reignited activism by shareholders, who have new tools for advice on proxy matters, and hedge funds are intervening aggressively.
- Boards of directors have grown less cozy. More outsiders have made them less chummy and more demanding.
— Adapted from “Schumpeter: The shackled boss,” The Economist.