When the former Prime Minister Lee Kuan Yew stepped down in 1990, he became Senior Minister. As Senior Minister he still wielded influence through his past experience and extensive network. When Mr Lee's successor stepped down and became Senior Minister in 2004, Mr Lee received the title Mentor Minister. As indicated by the title, the Mentor Minister would wield less power and instead focus on advice. I am not sure it makes sense to have a Senior Minister in politics and currently Singapore neither has a Senior Minister nor a Mentor Minister. Mr Lee resigned from that position in 2011. Maybe the SM and MM titles were formed exclusively to honour Mr Lee and make sure he could continue to contribute to Singapore.
This post is about corporate governance and I am not suggesting that a retiring CEO should become Senior CEO. What I am suggesting is that the old CEO should get a position on the board of directors. Probably not as chairman but as a regular board member. This creates a certain amount of continuity and the old CEO still has an external and internal network that is very useful for the company. The network is also useful for the board of directors that can get another information source about what is happening at lower ranks in the organisation. The board should represent the owners, but it is hard to find owners in real flesh and blood in this age of institutional ownership. Compare the old CEO to a tenant farmer that has cultivated his leasehold land for a long time. The farmer sees himself as the de facto owner of the land.
It is possible that the current CEO does not like having a retired CEO on the board. The old CEO will meddle and ask a lot of difficult questions. The old CEO might be too influenced by the way business was conducted ten or twenty years ago. This is besides the point. The board should not be a matter of convenience for the current CEO. The board should make sure that their hired hand, the current CEO, does what is in the long term interest of the owners. The old CEO does not not have any more power than any other board member.
This post is about corporate governance and I am not suggesting that a retiring CEO should become Senior CEO. What I am suggesting is that the old CEO should get a position on the board of directors. Probably not as chairman but as a regular board member. This creates a certain amount of continuity and the old CEO still has an external and internal network that is very useful for the company. The network is also useful for the board of directors that can get another information source about what is happening at lower ranks in the organisation. The board should represent the owners, but it is hard to find owners in real flesh and blood in this age of institutional ownership. Compare the old CEO to a tenant farmer that has cultivated his leasehold land for a long time. The farmer sees himself as the de facto owner of the land.
It is possible that the current CEO does not like having a retired CEO on the board. The old CEO will meddle and ask a lot of difficult questions. The old CEO might be too influenced by the way business was conducted ten or twenty years ago. This is besides the point. The board should not be a matter of convenience for the current CEO. The board should make sure that their hired hand, the current CEO, does what is in the long term interest of the owners. The old CEO does not not have any more power than any other board member.
The current CEO should have been hired for his extensive skill set and a good way to scrutinise his interpersonal skills is for the other board members to observe the relationship between the current and the old CEO. If the current CEO cannot utilise the external and internal social network of the retired CEO and if he cannot deal with difficult questions in a constructive manner, the current CEO is not the right man for the job.
There is no need for a fixed rule, maybe even two old CEOs can sit on the board. And naturally, if the CEOis fired decides to spend more time with his family, it is better to keep him far away from the company in the interest of his family.
There is no need for a fixed rule, maybe even two old CEOs can sit on the board. And naturally, if the CEO
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