What is a “real” CEO? WashPo Perspective – Trump wasn’t a real CEO.

https://www.washingtonpost.com/posteverything/wp/2017/02/21/trump-wasnt-a-real-ceo-no-wonder-his-white-house-is-disorganized/?utm_term=.15fc691050f6

The author of the piece argues that Trump’s experience running a family enterprise is not equivalent to running a publicly traded company and, thus, did not equip him with the skills to lead our country.

Is it the size of the company? the type of company? or, is it the type of person?

3 thoughts on “What is a “real” CEO? WashPo Perspective – Trump wasn’t a real CEO.

  1. Yikes. I am not going to use this as a platform to defend President Trump. But it’s a bit of a concern when a professor at a reasonably well-known university makes a sweeping statement to the effect that CEOs of “family businesses” aren’t “real CEOs.” To be frank, I’m surprised that the Washington Post would even run such a story. Here’s a link to a story about the 21 biggest family businesses in the world:

    http://www.businessinsider.com/the-worlds-21-biggest-family-owned-businesses-2015-7/#-reliance-industries-5

    Is Professor Spector really going to argue that the CEOs of companies like Phillips 66, Wal-Mart, Carnival Cruise Lines, McKesson Health Care, Tata Industries, Nike, Volkswagen, Samsung, Oracle, Anheuser-Busch, and Novartis aren’t “real” CEOs?

    He seems to be suggested that the only “real” CEOs are those running publicly-traded companies. Given that we have nearly 27 million firms of one form or another, and fewer than 5000 of them are publicly-traded companies, that’s a lot of people who aren’t “real” CEOs.

    Nor is the selection of entity a determinative factor. A lot of companies that the public knows well, like Gucci and BMW run their American divisions as LLCs. Check out this report from the Tax Foundation, which comments on “the shrinking corporate sector” as more and more firms choose a pass-through entity like an LLC.

    https://taxfoundation.org/america-s-shrinking-corporate-sector/

    This writer is free to criticize the president’s policies, or what he perceives as the apparent disorganization of the White House. But smearing family businesses or the selection of entities with pass-through taxation just makes him look ignorant.

    • Indeed! Personally, I was taken aback by the suggestion that a company’s public or private status would somehow correlate with how well it was run. WorldCom and Enron were public too. I think the more operative question is whether an individual leader possesses the aptitudes required to run such a large scale operation.

    • Professor Hollis, I completely agree that the author is suggesting that the only “real” CEOs are those of publicly-traded companies. The article states: “Trump, by contrast, as the head of a family business was accountable to no one and reportedly ran his company that way.”

      Moreover, we’ve talked in class about the role of the law in helping entrepreneurs. Yet, the author broadly criticizes the protections offered by LLCs, stating: “LLCs are specifically designed to offer owners tax advantages, maximum flexibility, and financial and legal protections without either the benefits (such as access to equity capital markets) or the many obligations of a public corporation.” It’s surprising that he frowns upon the opportunity for “tax advantages” and “maximum flexibility.”
      This criticism is especially shocking, as well, given today’s debate about whether the law should be more heavily fostering the growth of young companies, rather than impeding their development.