I was amazed when I first learned that the Obama administration had requested the resignation of GM CEO Rick Wagoner. After thinking about it for a few minutes, I became dismayed.
Did Rick Wagoner deserve to lose his job? I don’t know. But I do know that it is not the role of government to call for the job of the chief executive of a public company. Public companies are typically run by an executive. That executive is hired by and answers to a board of directors. The board of directors is elected by the shareholders, and the board is responsible for ensuring that the company is run in the best interests of the shareholder owners. Nowhere in this chain of command do I see the federal government!
I can hear people screaming now, “But GM was asking for a bailout from the Federal government. That gives them the right to pick the CEO.” I disagree. The shareholders are still the owners of GM, and they should get to pick who runs their company. The government can choose whether or not the company is deserving of the bailout based on a number of factors including who is running the company. But when they force the resignation of the chief executive, they’re taking away the power and authority of the current owners, and that’s not right.