This is simply nonsense.

All companies once they reach a certain size (including Tesla, SpaceX) have a Senior Leadership Team which decides on the critical decisions affecting the company.

This personality obsession is really only perpetuated by people who haven't worked in business and don't realise just how much of a team effort it is.

The thing is, it's really critical to have that <strike>dictator</strike>CEO in charge of the company to reign in the senior leadership, otherwise what happens is the creation of fiefdoms and <strike>intra-oligarchic</strike>turf battles at the expense of overall success.

Someone on this site mentioned Pournelle's Iron Law of Bureaucracy: https://en.wikipedia.org/wiki/Jerry_Pournelle#Pournelle's_ir...

And the CEO is the counterweight to that oligarchic rule. You see this, for example, in the constant battles that kings wage against the nobility.

I've been in companies that became founder led to professional CEO led, and you can see the difference in how effective a company is. I think there is great shareholder value also in founder led companies too, which have led to the growth of some of the largest and most successful companies in the world. When gates left microsoft was probably the begining of the company becoming somewhat irrellevant. Apple, tesla, epic, facebook, google, etc are all great examples of this.

There is a really great possibility that america shoots it's future economic growth in the foot with something like this, just because it's future superstars companies are not led by their great founders.

The Space Shuttle is what happens with design by committee.

> nonsense

May I present Steve Jobs, another obvious example? Ray Croc who built McDonald's from a single location into a world empire.

Steve Jobs, who became CEO when Apple, as a public company, hired him from outside the company?

Who literally saved Apple from their attempted corporate suicide? Yeah, I think he is a good example of why you need a strong founder sometimes.

I think their point is that you can have a strong leader that doesn't have control of the company through ownership mechanism.

Steve Jobs at Apple is a perfect example, since it was a publicly traded company that Steve Jobs didn't control. However, he was still able to be an extremely effective leader as the CEO.

He had de facto control. Nobody was able to successfully defy him. He used this control to force his vision upon Apple. No committee would have done what he did.

That's... not the point at all? This post is about a law that (to Sweeney's claim) would force founders to sell their controlling stock. This law wouldn't affect "de facto" control of a company -- it would affect actual stock-driven control of a company. The fact that Jobs did not have stock-driven control of Apple, and yet he was still able to "force his vision upon Apple" as you said, would make him a good example of why this law could be effective, since this law would not have affected Jobs' control of Apple.

Right, that's exactly my point!

It's possible to be CEO, and exert control over a company without literally owning >51% of the voting shares.

A good leader can "control" a company without having legal control over it. That's exactly the point about Steve Jobs.

The assertion is that: It is possible to be a dictatorial executive CEO, without having 51% of the voting rights of the company. This is the corollary of "losing control of the voting rights of the company doesn't automatically imply that the company must be run by committee". Steve Jobs proves both of those assertions to be true.

I worked at Apple when Steve Jobs was there. Yes he's amazing.

But people like Avie Tevanian, Tim Cook, Bertrand Serlet, Bob Mansfield, Johnny Ive, Dan Riccio etc. all played critical roles in turning Apple around.

iPhone simply isn't a success without all of the above functioning at a high level.

Of course those people helped.

But there's no doubt who was in charge and who set the direction. From everything I've read about Apple, it was Jobs who was in command, and everyone else followed.

Well I would suggesting looking a bit more into the company.

Because it's never been the case that Steve Jobs was in charge and everyone just fell in line. It's always been consultative and has always been the leadership team making the decisions. It's in fact how most companies run.

Especially given Steve was not 100% during most of his time at Apple.

The point is there has to be someone to make the final decisions, be they talented or not. You could vote on everything, but I don't think that would be efficient or even make sense for all circumstances.

But what does that have to do with that person having a majority interest in the company?

Hard disagree.

A senior leadership team without a key decision maker is fundamentally lost and seeks only self preservation through short term goals.

Here's another example: every government on Earth. All have a single key decision maker at the top. In democracies they can be kicked out, but they have total control while they're in power.

> Here's another example: every government on Earth. All have a single key decision maker at the top.

No, they don't. A system with a council with a chair with no significant additional decisionmaking power over other members is not unheard of.

> All have a single key decision maker at the top. In democracies they can be kicked out, but they have total control while they're in power

This isn't remotely correct.

a) All democracies I can think of are derived from the Westminister system where there are branches of government e.g. House/Senate who need to agree to get laws passed. Pretty far from total control as Biden is experiencing now.

b) Many democracies e.g. Australia don't have the PM/President be directly elected and instead are appointed by the winning party. Thus their power and control is limited to what is gifted by the party and can be withdrawn at any time at which point a new leader is appointed. Again pretty far from total control.

They tend to stagnate after the founder leaves.

any actual data to back that up? Looking at the top 50 American businesses by market cap probably 90%+ aren't run by founders, and plenty of the largest ones have continued to grow just fine. Apple, Microsoft just two name to trillion dollar businesses.

Also look at the top 50 businesses and how many still have founder control. In none of them does the founder still control 50% of the stock, and only a few of them (at least Facebook and Google) do the founder(s) control over 50% of the voting stock.

For example, Bezos only owns 16% of the voting stock of Amazon, Musk only owns 22% of the voting stock of Tesla yet neither are in any danger.

Yes, they do not have a controlling stake (50%+1) but both Bezos and Musk are the largest shareholders in their respective companies wielding huge influence.

I don't think your first sentence was necessary.

it makes it all the more important to decide who you get funding from too, since control dissipates more. this would be interesting.

Bring back kings!

Elon Musk controls less than 25% of the voting shares of Tesla, yet the company still exists and in fact is thriving.

How many shares of Apple did Steve Jobs control when he was the CEO?

This is just a ridiculous argument that companies can only succeed if the Founders/CEOs have absolute voting control. There are many examples of shareholders being more than happy to put their votes behind whatever the CEO wants as long as they believe in the CEO.

It's not a binary situation where you either own 51% or not. The larger the share of the company you own, the fewer stakeholders you need to convince to vote in your favor.

e.g. having 49% equity only requires ~2% of remaining shareholders to agree with any of your decisions.

If you're making remotely justifiable decisions, you're likely to get a decent chunk of shareholders supporting pretty much any position.

Also it's common to stack the board with allies who you can trust to vote in your favor/support your decisions.

So doesn't require much equity to have de facto control. But there will likely be a big difference in influence between, say, 10% and 20%

I'm in sympathy with that argument, but I don't think that singularly driven people are motivated by profit alone, and that they'll stop if there's some change is the underlying property ownership calculus.

Also, it's worth considering that not everything great is good, so perhaps a braking or governance system (in the sense of an engine) is worth requiring on any enterprise sufficiently large to become a juggernaut.

If a committee can reject their initiatives, how are they going to implement them?

> it's worth considering that not everything great is good, so perhaps a braking or governance system (in the sense of an engine) is worth requiring on any enterprise sufficiently large to become a juggernaut.

Yeah, let's just throw SpaceX in the trash heap. Nevermind that NASA, the organization run by committee, has failed to make space accessible and routine.

The "braking system" is already in place. It's the free market. Once the "juggernaut" fails to please the customers, it goes down the tubes.

Smart leaders have a nay-sayer to whisper in their ears when they're making a mistake. That doesn't mean they aren't in command, though.

The fact that Musk can get rid of her at any time speaks for itself. It doesn't mean she's a committee, either.

I've long suspected that the reason McCartney and Lennon wrote great songs for the Beatles, and not-so-great ones afterwards, is because each was willing to tell the other when their work was crap. Afterwards, they just had sycophants who'd tell them every note they wrote was fantastic.