Question of the week — Busyness in business

5817572653_f9dcd7d745_oSo evidently, according to Daniel Gross, on the Daily Beast (here,):

[a]bout 66 minutes into Facebook’s annual shareholder meeting earlier this week, a stockowner stood up and posed a question to Ms. Sheryl Sandberg, the company’s long-serving chief operating officer who this spring penned a best-selling book, Lean In, and then created a nonprofit group, to promote women in the workplace.

“You wrote a great book in the last year, spent a lot of time promoting it, traveling around. I’m sure it did a lot of positive things for Facebook’s ability to attract people.” He said. “However, my concern is that took a lot of time and activity in addition to your substantial responsibilities as COO of Facebook. How can you assure me that you’ll be just as committed to Facebook over the next 12 months as you were the previous four or five years? …”

The question clearly qualifies for at least honorable mention as question of the week, and it should resonate with most shareholders in larger North American companies where a member of the executive leadership group, who — in return for huge compensation, perquisites that would make Louis XIV of France, le Roi-Soleil, envious, and a level of job security that is unparalleled by any offered by any social security system across the globe — are expected to (and I paraphrase the standard language from executive employment agreements) during his or employment devote his or her full business time and attention to the performance of services for the company.

Ms. Sandberg, who received an obscene $26,216,173 in compensation in 2012 and $30,957,954 in 2011 (I ignore the perquisites, which, I am sure, are not inconsiderable) while the company that she was expected to help operate saw its per share price drop from $38 to $23, or so (with interim drops even leading to per share prices being less than $20,) has become somewhat of a poster-girl for the “serious business” side of Facebook, but, certainly, it is hard to see how this has manifested itself in improved performance, and is hard to see how the position as the COO of a company with a market capitalization in excess of $60 billion is compatible with her many other activities, such as book writing, personal interviews, creation of a non-profit group, and Board of Directors membership in the Walt Disney Company and Starbucks Corporation.

Certainly, I would think that Facebook’s shareholders would be entitled to wonder if prohibiting Ms. Sandberg from these activities would increase her focus on the company’s performance.

Personally, I believe that, if you pay for someone’s time, you can reasonably expect them to dedicate their time and focus to your issues, and if they don’t, then, frankly, I think you should fire them — immediately.

There is another, related problem here. While executive leaders carry their busyness around as a badge of honor (in business if you are not constantly busy, you apparently are doing something wrong,) they also appear to have loads of extra time to write books, go on media tours, compete in sailing events, and travel the world for leisure. So, what is it? Are you a busy business person or do you have all sort of leisure time to pursue extracurricular activities?

Mr. Jack Welch, the former CEO of General Electric, is another example of the busyness obsessed business person. While always promoting the busy business person story, he somehow found time to travel the world, take naps in his office, divorce and remarry (repeatedly) — probably one of the most distracting and time-consuming things a human being can do, and write a comprehensive biography and management philosophy book. But then Mr. Welch was always an enigma, stating, for instance, that “[o]n the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy… your main constituencies are your employees, your customers and your products” while at the same time reducing General Electric’s workforce from 411 thousand employees in 1980 to 299 thousand in 1985, while aggressively replacing real, tangible businesses that produces real, valuable products for the stakeholders with the monster that would become GE Finance.

And, of course, the problem is not isolated to private industry. General John R. Allen, for instance, had time to correspond extensively with Ms. Jill Kelley about god-only-knows what while allegedly aggressively prosecuting two wars (something I wrote about here). At the same time, his superior officer, General David Howell Petraeus, who was, I guess, also expected to prosecute the two wars with full vigor, found time to wine, dine, and otherwise impress Ms. Paula Broadwell in locations around the globe and write a book (something I wrote about here.)

So, in the interest of corporate governance, I tip my hat to the civilian that stood up at the Facebook annual meeting and asked the question that should be on every stakeholder’s mind: Should you not be minding the shop instead of running around having a good time?

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