In this book, the authors explore the history of the CEO from 1900 to the present day. Aldous and Turner ask, ‘Who gets to the top job, what they do when they are at the top, what do they earn and are they successful?’ The authors argue that the story of Britain's economic change in the twentieth century is largely narrated from the perspective of politicians and policymakers. This approach omits the hugely influential role of corporate leaders on Britain's economy. This book fills that gap and tells the story of Britain's economy since 1900 through the lens of its corporate leaders. The book is rich in narrative detail and anecdotes, which makes it a highly entertaining read. The authors address the questions on the CEO by assembling a database of the top 100 most valuable UK companies on the London Stock Exchange since 1900. This database comprises 475 companies and 1,397 CEOs and provides the empirical backbone of their analysis. The book develops five central themes that speak to ongoing debates about CEOs. First, how has the role of the CEO changed? This question addresses how the professional manager CEO came to dominate the leadership of the UK's largest firms. Second, how did CEOs’ training and career experiences develop? Interestingly, professional experience in accounting and engineering became more widespread, while those with deep insights into the company and industry were preferred to outsiders. The third thread examines how the scope of the CEO role has been determined by changes in corporate governance regimes. Fourth, the book examines the social mobility and diversity of CEOs. The book observes how aristocrats and social elites rapidly disappeared as the leaders of big business were superseded by professional managers. The final thread looks at the performance of CEOs and the effect they have on their companies and the wider economy. This question is explored in the context of the era and in relation to competitor companies and economies. The book is divided into seven chapters. Chapter 2 takes the reader through the journey of the aristocratic CEO who drove innovations in both business and society. The chapter discusses how British social elites were among 41 per cent of the CEOs who were peers of the realm and dominated corporate leadership roles. Chapter 3 looks at the role of the CEO during the interwar period, where family and founder CEOs were prevalent, and how they were particularly challenged by succession issues. Dynamic founders and family networks cooperated closely with the government to navigate the sea of instability and upheaval of the interwar years, leading to the establishment of the United Kingdom's biggest and most successful companies of the twentieth century. Over time, as company ownership became diffused and diluted through mergers, the influence of families and founders waned in the years after the Second World War. This governance structure was replaced by managing directors at the top of British companies. Chapter 4 explores the post-Second World War era, where Britain's CEOs faced mounting economic challenges. In the midst of rising international competition, there were calls for a managerial revolution to exploit new technologies. Professionals such as engineers and accountants made up an increasing proportion of top CEOs. These trends increased social diversity, with a rising number of CEOs reaching the top positions through merit rather than social position or family. The chapter argues that, while training in accountancy and engineering brought a focus on efficiency, it led to more bureaucratic organizations and siloed thinking. Chapter 5 explores the 1970s, where Britain's economic malaise had become chronic. The chapter explores how a group of outsiders sought to cure the malaise by unleashing market forces, such as a hostile takeover to shake-up poor-quality incumbent management. Chapter 6 examines how CEOs took advantage of structural economic changes during the 1990s, such as privatizations, globalization, and the information and communication technology (ICT) revolution. During the 1990s and 2000s, CEOs became ‘Fat Cats’ and hubristic CEOs who created several corporate failures which greatly damaged Britain's economy. This chapter explores a pertinent question. Did the increased pay of CEOs, especially those of telecommunication companies, correspond with improved corporate performance? The authors argue that tying pay to performance induces short-termism and other behaviours not conducive to shareholders’ interests. The chapter also shows that the Cadbury report sought to rein in CEO excesses, but with limited effect. Chapter 7 explores and argues that those involved in selecting and preparing CEOs need to develop pathways that identify individuals with interpersonal characteristics, values, and vision focused on the long-term stewardship of the company. More importantly, the chapter also argues that the corporate governance framework needs to be strengthened through legislation to align the interests of CEOs with other company stakeholders. A related question concerns the extent to which patterns observed among the largest listed firms can be generalized to the wider British corporate economy. While the focus on elite companies is justified given their economic importance, future work might explore how these dynamics differ in smaller or regionally embedded firms. Finally, why should we care about CEOs? As the authors make clear, CEOs wield substantial economic power and exert significant influence over politics and public policy. Overall, this book offers fresh insights into major questions surrounding British economic development, meritocracy, social mobility, income inequality, and the evolving relationship between business and state.
Tehreem Husain (Thu,) studied this question.