TITLE

Board composition and high-flying founders: Hints of trouble to come?

AUTHOR(S)
Ranft, Annette L.; O'Neill, Hugh M.
PUB. DATE
February 2001
SOURCE
Academy of Management Executive;Feb2001, Vol. 15 Issue 1, p126
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
High-flying founders are the rock stars of the new economy and the dot-com world. Jeff Bezos at Amazon, Stephen Case at America Online, Bill Gates at Microsoft are strong leaders of great companies. Previous generations produced great businesses and legendary leaders too, and many of them made mistakes of grand proportions. Henry Ford failed to see the value of diversification until nearly too late. Kenneth Olsen, cofounder of Digital Equipment Corp., suffered a form of myopia in the computer industry. Clearly, confidence born of great achievements can lead to overly conservative responses to business threats. We believe that business success creates personal and organizational forces that lead to a form of cautious conservatism, and perhaps arrogant disdain, in the face of competitive pressures for high-flying firms. One protection against this inertia-inducing conservatism is a strong board. Successful founding CEOs, however, show a tendency towards adopting weak boards. Farsighted CEOs, and their board-level advisors, can pay attention to the design and behavior of boards in high-flying firms. These founders can avoid the traps of success, and maintain the entrepreneurial zest that builds their companies and their reputations.
ACCESSION #
4251562

 

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