OPINION: Beware the stories of 'doomed' CEOs

Barely a week goes by without a story in the business section of at least one of the Sunday papers that some chief executive's days are numbered.

Anthony Hilton
Anthony Hilton

The format is fairly standard - results in the company that he or she manages have not been as good as had been hoped. As a result the institutional investors have lost patience and are pressing for change. An announcement is expected soon. Rarely is anyone quoted by name. It is the kind of piece that is impossible to check.

It can also be deeply mischievous and should be treated with suspicion. A few years ago when I was more innocent in the ways of the world, such a story was fed to me. My source - a PR consultant - informed me that City fund managers were demanding that a certain chairman sack his chief executive. No fund manager was willing to comment for the record, but I was told that were I to phone the chairman he would confirm the substance of the tale.

So I did, and after a certain amount of protest that it was a scurrilous market rumour, he did indeed confirm that shareholders whom he would not name had approached him in confidence to demand a change of management.

As a result the piece was published. Two weeks later the chief executive did indeed depart and I quietly congratulated myself on getting one right.

Some years later I discovered the truth. It turns out the chairman could not stand the chief executive and had long been looking for a pretext to get him out. There was no shareholder revolt nor discontent of any kind. It was all an invention of the chairman, a story he fed to his PR consultant, who passed it on in good faith.

The published story now had credibility and armed with my cutting, the chairman called the rest of the board together and convinced them that they, as directors, would be in deep trouble with the City if they ignored this seething discontent. The only way out was 'reluctantly' to sack the chief executive. So they did and he was.

I have never trusted such stories since. Personality clashes between chairman and chief executive are far more common than anyone likes to admit. Best for the press not to become a tool in the battle of egos.

Anthony Hilton is City commentator on London's Evening Standard 

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