As someone who generally believes in the separation of the chairman and chief executive roles at the top of big companies, I am encouraged by the emergence of Ed Whitacre, the former chairman and chief executive of AT&T, as chairman of the new General Motors.
The New GM board clearly needs to do a better job of management oversight than the old one did, since it took the US government to force GM into the kind of restructuring and slimming-down it had long needed to undertake. The old board was a very poor guardian of shareholders’ interests.
Mr Whitacre is the sort of figure that New GM needs to balance the talents of Fritz Henderson, its chief executive, once it emerges from Chapter 11 bankruptcy. He is not a “car guy” but he has a lot of experience of running a big company and – importantly – of mergers and acquisitions.
Most heads of US companies are still reluctant to split the roles, although Mr Henderson thinks there are two jobs to be done. As a result, it is rare for a Fortune 500 company to have two strong figures at the helm, one focussing on management and the other on corporate governance.
Given the fluid state of the global auto industry, it also helps to have a chairman who is likely to be open to mergers and alliances with other groups, and able to negotiate good terms.
Hopefully, New GM will be an example to other US corporations, which is not something you could have said about the old model.
