Tag Archives: OWS

A Second Note on The First CEO: the CEO As Agent of Historical Change

Susy Jackson, an editor at Harvard Business Review, emailed me last week to tell me that she and her colleagues had discovered an illustration of the acronym “CEO” that predates the early instances discussed in my previous post on this subject.  Time to update that post and, while we’re at it, the entry on CEO in the Oxford English Dictionary. (I’ve emailed them to let them know).

A search through the HBR archives (one of Jackson’s colleagues described it as “not really very scientific, but fun”) turned up an article in the May June-1970 issue of HBR by Joseph O Eastlack, Jr. and and Phillip R. McDonald entitled “The Role of the CEO in Corporate Growth.” As we might expect, the article takes care to spell out and abbreviate the term in its first use: “chief executive officer (CEO)”; the speculation is that this was “standard treatment for a term that was thought to be known to HBR readers, but not so familiar that they could dispense with spelling it out altogether.” In 1970, after all, the CEO had just arrived on the scene.

A few thoughts about that entrance.

In my previous post I speculated that the term CEO may have come into wider use at HBR under the editorial direction of Ralph Lewis, who was appointed editor in chief in 1971, and oversaw several changes in editorial direction. This 1970 illustration of CEO predates that appointment; Edward Bursk was the editor in chief of HBR in 1970. Still, there’s no doubt HBR under Lewis’ direction helped define and disseminate the term.

Whether this more frequent recourse to the acronym in the pages of HBR was the result of Lewis’ policy or just a sign of the currency the acronym was gaining in management and governance discourse is hard to say. But it’s pretty clear that the wide acceptance of the acronym in the 1970s marks a shift – not just in editorial convention, but also in ideas about governance, leadership and power, within and without the corporation. By the mid to late 1970s, CEO is well on its way to becoming not just a convenient tag but an important construct of corporate power, social status and (by the 1980s) cultural celebrity.

The temptation to start painting on a broader canvas is almost irresistible. After all, big things are happening in the early 1970s, in business, in American society, around the world. When the figure of the CEO emerges in the 1970s, the heyday of the man in the gray flannel suit has reached its nadir. In America and throughout the industrialized West, the postwar boom – which witnessed the rise of the managerial class – has yielded to a grim post-industrial reality.

Indeed, the CEO will be one of the defining figures of the period that runs from roughly 1970 to 2010, the post-industrial period. In response to falling profit rates in manufacturing, we see during this period “a shift from productive enterprise to financial manipulation” (as Chomsky, summarizing economic historian Robert Bremmer, recently put it); I think it’s no coincidence that with the arrival of the CEO on the scene, the “financialization” of the economy has begun. (I understand the word is controversial; but let it stand for now: these are just broad strokes.)

The CEO emerges from this shift. He is its creature and creator – an agent entrusted with its execution – and the period of the CEO’s glory extends from the triumph of neo-liberalism during the Reagan-Thatcher era all the way to the financial crisis of 2008 and the institutional failures and social collapse it precipitates.

Bank of America Shareholder Meeting – A Failure

The Bank of America Board of Directors was on the defensive yesterday. There were protestors gathered outside the annual general meeting; security was high; inside, the mood was testy. In his opening remarks, Chairman of the Board Chad Holliday flubbed an announcement about question and answer time, prompting a shareholder to interrupt the preliminaries; and when Q & A on shareholder resolutions began in earnest, CEO Brian Moynihan stuck to terse, one-sentence, boilerplate answers to most questions, until one stockholder stood up and asked for “more nuance and explanation” and “a more thoughtful response” to the owners’ questions. General applause ensued, but the dialogue did not really improve. In that respect, the meeting felt like a lost opportunity: the Board simply refused to engage.

There were six shareholder resolutions but (as the Q & A revealed) really just three big issues on shareholders’ minds: executive compensation, predatory mortgage and lending practices, and political contributions.

One shareholder seemed to sum up the feelings of many in the room when he said that “it’s a comedy” to be a Bank of America shareholder, given the gap between the stock’s performance and the compensation of its executives. Several people directly asked Brian Moynihan to forgo (or, as one shareholder put it, “deny”) his raise for the coming year. This came to a head in an exchange with one shareholder, who said that the issue really came down to where Moynihan’s “heart” is. “Do you love your neighbor as yourself? Are you going to turn down your raise?” Like a boy at his catechism, Moynihan parsed the question and said that he had been raised to love his neighbor as he loves himself (how could he say otherwise?), but when it comes to turning down his raise the answer is simply “no”; and then he repeated a few prepared phrases about how his own compensation is “aligned” with the Bank’s strategic goals. That was his gospel.

Still, shareholders urged the bank to consider the “injustice” in the world, and Bank of America’s part in it. Activist shareholder Dawn Dannenbring (whose appearance at a JP Morgan shareholder meeting I blogged about here) asked the Board to think about why they need to have heightened security at their shareholder meetings: “If you were a better corporate neighbor,” she remarked, “you wouldn’t have to be so scared.” To charges that it had “decimated” the communities where it did business, the Bank responded with a bland assertion: “the success of communities is equal to our success”; at one point Moynihan even muttered the phrase “good for America,” but it sounded as if he had never really warmed to that talking point, and his voice trailed off.

Some tried to appeal to the bank’s business sense: if Bank of America is seen “not as part of the solution but as causing the problem,” it runs a “reputational risk.” That’s putting it mildly. Others were not so restrained: “You’ve got to stop foreclosing on families,” exclaimed one shareholder; and a number of people rose during the Q & A and told their own stories about how the bank – their bank – had ruined them. Moynihan was patient and even compassionate with these share-owning customers, and told them they could talk to a B of A “teammate” on the spot, that very day, about their problems. But the crowd was repeatedly reminded that these individual cases – their own cases or the cases of family and friends – did not bear on the proposals they had assembled to vote on. This was a myopic response at best, as if behind each of these proposals there were not thousands, hundreds of thousands, millions of individual stories that need to be told, and that make up the big picture of the bank’s role in America.

While the bank is reluctant to open a dialogue on its role in society, it is aggressive in its bid for political power and social influence. And in the wake of Citizens United, the battle lines around political spending are being drawn. A proposal to prohibit all political spending from the corporate treasury – which I wrote about in a previous post — received just 4 percent of the vote, but the resolution still counts as an important first step. Another political spending proposal, requiring Bank of America to disclose all grassroots lobbying, fared much better, garnering about 30 percent of the vote (right around the 32.73 percent it gained last year).

Calls for disclosure of political spending are getting harder to ignore. And though prohibitions and other checks on spending still face an uphill battle, the resolution to stop political spending at least gave shareholders a chance to say a few words about the risks and uncertain outcomes of profligate political spending. Shareholders cited research (by Hadani and others) to support their position; but it is hard to say whether this made any impression whatsoever on the Board. If so, they weren’t going to let it show. They just seemed to want to get the whole thing over with. They had not come to deliberate, or listen or learn. They had come to defend. And that is why the 2012 Bank of America shareholders’ annual meeting should be reckoned a failure.

The First CEO

For some time now, I have been wondering when and how the acronym “CEO” came into general use. This isn’t just a matter of idle etymological interest. CEO is one of those rare acronyms – like scuba, radar, and snafu – that have become words. And in the course of becoming a word, CEO has redefined our world.

I was intrigued by the entry in Webster’s Dictionary that seemed to pinpoint the date: 1975. Only Webster’s didn’t provide a citation or attestation. So I wrote to the publisher at the beginning of March to ask where this first CEO might be found. A mere two weeks later, a reply came from Joanne M. Despres, Etymology Editor at Merriam-Webster. She informed me that Webster’s researchers had found that first illustration of CEO in a British publication, Neville Osmond’s Handbook for Managers, volume 2 (London, 1975).

But it turns out they had not dug deep enough: “In reviewing the standard sources we use to research dates,” Despres wrote, “I noticed that the Oxford English Dictionary now reports pre-1975 evidence of the word’s existence.” The 2011 online edition of the OED reaches back across the Atlantic, to America, and a little further back in time, a few years earlier, to the March-April 1972 issue of the Harvard Business Review: there we discover “a technician in his early forties who joined the company three years ago as president but not CEO.” (In light of this new evidence, Despres has requested that Webster’s “date for CEO be revised at the first opportunity.”)

I hoped to find but I didn’t find an even earlier illustration yesterday, when I went to the New York Public Library to track down Despres’ OED reference and review past editions of the Harvard Business Review on microfilm. I still have a number of leads to follow. But in the course of my reading it became tolerably clear that someone at the Harvard Business Review made an editorial decision in late 1971 or early 1972 to start using – or allowing the use of — the acronym CEO. This was right around the time Ralph F. Lewis was named editor of the Review (in 1971). Lewis instituted a number of important changes at the Review; this fateful concession to shorthand may have been one of the more minor changes he made, but it had immediate consequences.

Once the term is allowed into the Review, it begins to populate the pages of the journal. There is no turning back. Along with the instance cited by the OED editors, there are a number of early illustrations of CEO in the Review of 1972. This one appears in Myles L. Mace’s article on “The President and the Board of Directors”: “I use the title ‘president’ to mean the chief executive officer, recognizing that in some corporations the CEO may have the title ‘chairman of the board.’” (Mace’s earlier articles for the Review, in 1965 and 1966, use “chief operating executive,” “chief executive,” and “president,” but not CEO. His Directors: Myth and Reality, published in 1971, adheres to the same long form usage.) We find the newfangled acronym, again, in “Conflict at the Summit: A Deadly Game” by Alonzo McDonald. Here, McDonald takes some care in introducing it:

Leaders are still consumed with the problem of how to organize the summit. Inevitably, it is the first topic that a newly appointed chief executive officer (CEO) wants to discuss with his most trusted counselors and confidants.

And then he can use it freely:

Many CEOs who sincerely see themselves in the role of moral leaders are perceived by others as confirmed and passionate addicts of power.

The point is not that the Harvard Business Review foisted the term CEO on us. It had most likely been in use, in the MBA classroom and in the corporate boardroom, for some time. The Review certainly helped disseminate the acronym; and it’s worth remembering that readers, subscribers and contributors were then, as now, influential, powerful and connected to other influential and powerful people. McDonald, for instance, would be named Managing Director at McKinsey in 1973. Lewis came to the Review from accounting firm Arthur Young and was “director of several prominent corporations”; at the time of his death in 1979, he sat on the boards of Houghton Mifflin, Twentieth- Century Film Corporation, and Paine, Webber, among others. Mace was one of the leading lights of Harvard Business School and served, as well, on a number of boards.

Mace’s work on the role of directors (in Myth and Reality) was especially influential and timely. There was then, as now, an urgent need for new bearings – a new orientation; and the sense that it is time to dispense with institutionalized illusions and find new direction goes well beyond issues of corporate governance. New, big, disturbing questions about the role of business in society, the counter-culture and the emerging global economic order are coming to a head. It’s not without significance that it’s at this moment – at the dawn of late twentieth-century neoliberalism — that CEO makes its first appearance.

It is only a matter of a decade or so before the word is regularly in the newspapers, on the TV, and on everyone’s lips, and the CEO has become what he is today: a cultural icon, celebrated and hated, creator and destroyer, a symbol of American success or the villain behind America’s current woes.

UPDATE: For a slightly earlier (1970) illustration of the acronym and some further discussion, see this post.

To Prosper We Need More Than Jobs

I’m always thrown by attempts to measure prosperity purely in terms of economic growth or high employment figures. Those measures are too restrictive, and they are also disorienting. Politicians who offer jobs leave me cold, and do us all a disservice. As I’ve written several times, the country is, or ought to be, more than a workcamp.

There’s an opportunity to reflect on that last point in Close to Home, the documentary Ofra Bickel made for Frontline about the 2008 financial crisis. In Chapter 4, we see Rob, a human resources executive who has “been out of work for a year,” attending a series of “networking functions.” He has found the job search an “insurmountable” challenge, and he hopes – in vain – that these networking events will help him get over the hurdle.

We see Rob and his fellow networkers – all of them out-of-work middle management types — exchanging business cards, practicing their pitches, learning how to introduce and present themselves. It’s an endless rehearsal for a debut that never comes, and Bikel finally decides to give up on Rob and on the networkers: it’s pretty clear none of this is going to pay off.

As Bikel realizes, there is something pathetic in their efforts. There is something ridiculous — and telling — here as well: a gathering of able-bodied, educated, smart American adults, all in dire economic straits, and all they can think to do is to practice for their next job interview. It never occurs to Rob or any of his fellow networkers to do something together, to join efforts and start something, to create something where there is nothing. In a word, they never really build a network. They simply want to get back on the corporate payroll. It’s disturbing to think that that’s all they know how to do.

What happened to that can-do spirit? American gumption? Bootstraps? Independence? Entrepreneurialism? Nowadays, over 90 percent of adult Americans are regular employees (as opposed to self-employed people); whether they have jobs or not, most Americans can think of themselves only as employees. Of course, it wasn’t always this way. There was a time, before the industrial era and the great waves of immigration it brought, when the majority of Americans did not have a “job” and wouldn’t take one unless they had to. “Being an employee was considered a form of bondage, only a step above indentured servitude,” as John Curl puts it in his history of American cooperative movements. “One submitted to it due to economic hardship, for as short a time as possible, then became free once more, independent, one’s own boss.”

We still like to pay tribute to the freedom from wage slavery we once enjoyed, or lament its loss. Take another film, this one from 1961: The Misfits, directed by John Huston, written by Arthur Miller and starring Clark Gable, Marilyn Monroe and Montgomery Clift. Gable plays Gay, an aging cowboy who thinks that most anything beats “working for wages” and sees employment for what it is – a loss of freedom.

Gay’s tragedy is that he has outlived the possibility of that freedom. The Wild West has become nothing more than a rodeo show; the cowboy life Gay leads is “like roping a dream. I just gotta find another way to be alive, that’s all,” he realizes, “if there is one anymore.” In the film’s closing scene, Gay, bloodied and defeated, drives off toward a new life, or at least what’s left of his life, with his friend Guido yelling after him: “Where’ll you be? Some gas station polishin’ windshields? Makin’ change in a supermarket? Try the Laundromat! They need a fella there to load the machines!” That’s all that’s left for cowboys in Miller’s postwar America.

The most important thing to realize is that it doesn’t have to be this way. You don’t have to succumb to the despair of another networking meeting or turn in your cowboy hat for a Walmart greeter’s cap. And you don’t have to pull yourself up by your own bootstraps. Few people can or ever have. Throughout our early frontier history and well into the industrial era, independent Americans relied on altruism, mutual-aid societies and cooperative working arrangements to build houses and raise barns, protect one another from fires or other losses, or “to accomplish their liberation from wage slavery.” That’s the story Curl’s book tells — a side of the American story we don’t usually acknowledge, but ought to understand and appreciate if we hope to prosper, together, with or without jobs.

Why Don’t These Rich Liberals Act Like the Self-Serving Bastards They Are?

In 1998, Howie Klein was the president of Reprise Records, and had the privilege of attending a dinner Bill Clinton threw to honor Vaclav Havel. The entertainment that evening was Lou Reed. (Havel is a big fan.) Klein was seated at a table with Senator Dick Lugar, the Indiana Republican, and he remembers Lugar’s reaction to Reed’s performance:

Lou Reed sang “Dirty Blvd,” his then-current hit. People kind of recognized the melody or something and they kind of danced in their seats. I remember Lugar could barely contain himself. His big plastic smile never even faded when Lou sang:

Give me your hungry, your tired your poor I’ll piss on ’em

That’s what the Statue of Bigotry says

Your poor huddled masses, let’s club ’em to death

and get it over with and just dump ’em on the boulevard

No one seems to have noticed but me and my friend Brian.

For that brief moment, it was as if the country had not just gone through the adolescent convulsions of the Lewinsky affair. Vice President Gore’s “chair rocked constantly during Reed’s 35-minute performance,” according to a report in the Washington Post.


“Political leaders rarely listen to lyrics,” writes Klein. Maybe that’s why none of the APEC leaders took much notice the other night when Makana, dressed in an Occupy with Aloha t-shirt, sang his “Occupy” song for 45 minutes to the assembled dignitaries. But I wonder if that’s all there is to it.

Something else might be at work here as well. I am especially intrigued by the Post report of Al Gore rocking back and forth in his chair to Lou Reed. That’s not someone ignoring the music; that’s someone digging it. And from what I have seen and read about Al Gore, it’s pretty safe to assume that he was genuinely enjoying Reed’s performance. And why not? In his mind, he’s no bigot; he’s a friend of the poor and the huddled masses. How could he think otherwise? He and Lou Reed are on the same side; he shares the rocker’s indignation.

I am willing to bet that Gore doesn’t see himself as an oppressor or exploiter, and neither, for that matter, does Dick Lugar. Does that make them delusional, or hypocrites, or is it evidence of false consciousness? Maybe. Gore’s detractors like to put up images of his compound in Tennessee and talk about its huge energy footprint. They calculate how much fossil fuel he burns, flying around in airplanes to educate people about climate change. It’s an easy game to play.

But I wonder what it really proves about Al Gore (or Dick Lugar, or anyone, for that matter). Would Gore be a more credible messenger if he lived in a small solar-powered cabin and cycled to his engagements? Probably. Would you and I have heard of him? Unlikely. Would the world be better off if he just gave up, sank into an oblivious rich man’s hedonism, and cackled with wild delight as he drove a Hummer over the fragile habitats of endangered species? Probably not.

The right has now learned from the politically-correct left to demand ideological and moral purity from the left. There is something ridiculous in the demand. I’d say the same about putting too much emphasis on moral consistency.

Be that as it may, it’s now Michael Moore’s turn to prove his authenticity, or at least disprove his duplicity. While mixing with the Occupy protestors, Moore has had to defend himself, repeatedly, against the charge that he belongs to the 1 percent. And there’s little doubt he does, if you look strictly at the numbers: the top one percent in this country earn around 350,000 dollars a year.

So a CBS reporter in Denver asks Moore whether it’s true that he’s worth 50 million dollars; Moore calls the reporter a punk and tells him to stop lying. A blogger with the same Denver TV station lambasts Moore for his “hypocrisy.”  Fox News and the New York Post have been flashing pictures of Moore’s lavish Torch Lake compound. They were also posted on Andrew Breitbart’s Big Hollywood blog.

On CNN, Piers Morgan put the question to Moore this way:

“I need you to admit the bleeding obvious. I need you to sit here and say, ‘I’m in the 1 percent,’ ” Morgan pressed.
“I’m not,” Moore insisted. “I am devoting my life to those who have less and who have been crapped upon by the system.”

His evasive answer caused an uproar. “How Rich is Mr. 99%?” “Hypocrite and Liar.” “Occupy Wall Street Supporter Michael Moore Belongs to the Affluent Class.” But it’s also worth thinking about. Moore is trying, clumsily, to say you can be in a socio-economic class but not of it. He would have a much easier time of it if he would just “admit the bleeding obvious,” but let’s not pretend for a moment that that would silence his critics. Might Michael Moore be acting in his own rational economic self-interest by pretending to be one of, or at least one with, the 99 percent? Sure. But I’m naive enough, or optimistic enough about human nature, to think Moore’s concern for “those who have less” is genuine. Does it amount to more than noblesse oblige dressed down in a baseball cap? That’s hard to say.

It’s mildly amusing to see the American news media peddling class warfare and crude ideas about class-consciousness, but if that’s the game we’re playing, then let’s start looking at the class interests behind the American news media. CNN? Piers Morgan? CBS? Fox News? Andrew Breitbart? Follow the money. Let’s specify the interests behind the American news media’s questioning of Michael Moore’s true allegiances or those asking about his annual income. Let’s look at the rich people they ostracize and those they unthinkingly celebrate. It should be obvious – bleeding obvious — that Michael Moore is not the problem; but there are people determined to make him the problem, and you have to wonder why.

I’m certainly not out to defend Michael Moore. Nor does he need me to defend him. Yes, Michael Moore has gotten very rich from his books and films. Yes, he’s obnoxious. Yes, he shamelessly promotes himself. Would he command more credence if he were not all those things – if he were poor, soft-spoken, and retiring? Maybe, but then most likely his films would never have gotten made or shown, and — more to the point — the TV would just find somebody else to distract us all from the real troubles of the day, or some other way to feed the resentment that keeps ordinary people from acting in their own best interests.