By Harry Garretsen and Janka Stoker *
(exechange) — June 1, 2019 — Facebook is under attack. As such, this is not news because Facebook has already been criticized for its market dominance and data privacy policies.
But now, the leader himself is being scrutinized. Several shareholders are challenging the position of the CEO. As founder, CEO Mark Zuckerberg has been in charge for 15 years.
On average, CEOs do not perform better when their tenure increases. A CEO roughly peaks after five years (1), and even earlier in dynamic sectors such as IT.
As a shareholder, how do you get rid of your CEO once their shelf life has expired?
One way is to ensure sufficient internal countervailing power. Another way to get new leadership is via the market; if a firm really starts to underperform, it often implies the exit of the CEO. But this is unlikely to happen at Facebook because the firm is just too powerful. Enforcing a change in leadership at such a superstar firm should however appeal to everyone.
So, what to do? The more than 2.2 billion people could simply decide to no longer use their services. After all, we also do this with other products past their expiration date.
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(1) https://hbr.org/2013/03/long-ceo-tenure-can-hurt-performance
* The writers are professors at the University of Groningen.
Editor’s note: This is a guest post.