The Corporate Governance of Iconic Executives

This Essay explores the special corporate governance challenges posed by iconic executives. Iconic executives are complex, bittersweet figures in corporate governance narratives. They are alluring, larger-than-life corporate figures who often govern freely. Iconic executives frequently rule like monarchs over their firms, offering lofty promises to shareholders, directors, and managers under their reign. But like many stories of powerful and influential figures, the narratives of iconic executives also contain adversity and danger. Part of the acquiescence and enchantment with such figures is rooted in the virtuous promises embodied by their presence, promises of unity, accountability, and effectiveness in corporate governance. Unfortunately, for many shareholders, these promises turn out to be illusory, empty, and full of peril The threatening hollowness of such promises exists because the virtues of unity, accountability, and effectiveness pledged by iconic executives also contain the vices of excessive deference, overconfidence, and licentiousness. Given such dangerous duplicity, this Essay calls for greater governance of iconic executives. INTRODUCTION I. ICONIC EXECUTIVES II. THE PROMISE OF UNITARY CORPORATE EXECUTIVES A. Unity B. Accountability C. Effectiveness III. THE PERILS OF IMPERIAL CORPORATE GOVERNANCE A. Excessive Deference 1. Organizational Deference 2. Legal Deference B. Overconfidence C. Licentiousness CONCLUSION INTRODUCTION The modern corporation is one of the greatest fictions and inventions of humankind. (1) It has made unparalleled wealth, unmatched progress, and unimaginable innovations a reality through the ingenuity and hard work of enterprising individuals. Nonetheless, the modem corporation is not without its flaws and challenges, imperfections and difficulties coded in its essential form. The modern corporation is owned by its shareholders, but governed by its directors and officers. (2) This inherent dissonance between ownership and management creates many advantages, (3) but also presents many corporate governance challenges. (4) Such challenges are exponentially magnified and further complicated when the manager of a corporation is of elevated stature and prominence, when the corporate manager is an "iconic executive." (5) This special set of challenges resides in corporate governance territory partially distinct from plots claimed by directorism, (6) managerialism, (7) and shareholderism. (8) The aim of this Essay is to venture into this distinct territory and explore this special set of corporate governance issues: the corporate governance challenges posed by powerful and influential iconic executives. This Essay does not intend to serve as a normative, wholesale indictment of the corporate governance of iconic executives, nor does it intend to serve as a descriptive, resigned apology of the status quo. Instead, this Essay inquires into the unique considerations presented by the corporate governance of iconic executives and cautions against blind assent to their governance. This Essay proceeds with this inquiry in three parts. Part I begins with a character sketch of iconic executives. (9) It describes their distinct attributes and functions in the modern corporation, and proffers an explanation for their seductive allure. Part II then explores the promise of iconic executives. Borrowing from constitutional law's discourse on the unitary presidency, (10) it illuminates the interrelated virtues of unity, accountability, and effectiveness in having a strong corporate unitary executive. Pivoting into the shadows, Part III examines the vices of such imperial governance and warns of the perils of iconic executives. Utilizing an instructive, albeit inelegant, penumbra cast by political despots, dictators, and strongmen, it warns against excessive deference, overconfidence, and licentiousness in boardrooms and executive suites. …