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Comment by Apocryphon | Hacker News Reader

Random idea- has any corporation operated with something akin to term limits?

Seems like it would be a terrible idea. CEOs are already incredibly short sighted, neglecting long-term disasters for short-term gains. Sometimes it seems as though CEOs aren't able to see beyond the next quarterly earnings report. Having a limit would incentivize running the company into the ground to get the highest quarterly profit possible. What do they care? Someone else will be CEO next year.

But surely if CEOs had term limits then the good ones would be jumping from one company to another, so if they think too short term then no board would hire them.

Boards would hire the CEOs that set the next one up for success.

Kinda like how term limits for the us president doesn’t usually result in that type of behavior since it would screw over their party.

That only works if you assume high-quality objectively-understandable information.

Boards are the ones hiring the bad CEOs now. They're not equipped to tell the difference, even when they're not actively colluding to juice the short-term share prices so they can get out with a yachtload of money.

Maybe tying their severance, retirement package or stock options to the performance to the companies long term growth would help alleviate that problem.

The terms could be 5 years long, and re-electable.

It is possible to combine term-limits with a long share-vesting period in order to (potentially) reap the best of both strategies.

It’s actually quite common at certain types of organizations (typically foreign-owned) to appoint a local as CEO on a specific term and then to revisit when that’s up.

I had an airplane conversation with a manager at a multinational. He said they shuffled managers every couple of years. Bunch of reasons for that but partly gave the company better visibility into what's going on with a group because you have several managers on tap who've managed that group before. And if they have to fire a manager they have a number of people to tap for that role.

Huawei does this, I think every 18 months they change CEO among the leadership team.

Super interesting. Def think there’s lots of room for experimentation in corporate governance and corporation structure

Obviously not corporate, but I believe Rome had 1 year term limits for its 2 consuls.

Founder’s daughter has been CFO for over 10 years though

I understand they also don't get compensated much, relatively speaking. I think it fits with an Asian approach to business where companies are big conglomerates with much more cautious leadership (and therefore less expectation from them). At least historically.

Huawei has a very unusual leadership/ownership structure, even amongst its peers in the tech industry. Legally, its a worker-owned cooperative, but unlike most cooperatives, its workers don't directly vote on policy; rather they choose 51 shareholder representatives and 9 alternate representatives, who in turn select a politburo, which in turn selects a CEO from the standing committee.

Sounds great, what's the catch?

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