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Oil Spill Response: Why Companies Aren’t Run by the Board

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There is a reason why companies hire a CEO to make critical decisions.  If you want something to get done, then there needs to be someone in charge with a single, unified vision.  While the Board of Trustees generally retains the power to fire the CEO and may provide guidance for their direction, if they were to attempt to approve each and every one of the CEO’s decisions, the company would quickly falter.  It would be unable to keep pace with the market.

In cases where large companies are controlled by more than one individual, there are four possible outcomes.  One member takes a controlling share by buying out the others, one member of the group takes the position of the CEO and the rest step into the background, the partners hire an outside individual to step in and lead the company, or the company fails.  It cannot continue to exist without a single leader.

Need examples?  Google Inc. founders Sergey Brin and Lawrence Page hired Eric Schmidt to serve as the company’s Chairman and CEO to manage everyday operations.  Microsoft would not have existed with Paul Allen, but it was Bill Gates who became the active leader once the company got off the ground.  Allen eventually stepped away from the company management and sold a significant portion of his stock holdings.  Even academia recognizes the importance of a single leader.  Most, if not all, academic institutions are governed by a Board of Trustees, but it is the Chancellor, Principal, Headmaster, etc. who controls the school’s daily operations.

Now, enter Obama’s disastrous oil spill response.  It’s been almost sixty (60) days since the spill started, and all we’ve got to show for it is a website for the “Unified Command,” and a webcam-quality stream of the oil pouring into the ocean.  Politics aside, a committee of fifteen organizations, thirteen of which are federal bureaucracies—including: the Coast Guard, Minerals Management Service, NOAA, EPA, Department of Homeland Security, Department of the Interior, Department of Defense, Fish and Wildlife Service, National Park Service, Department of State, USGS, CDC, and OSHA—cannot work together long enough to fix the leak or cleanup the oil.  We’d have better results if these organizations were all working independently instead of grappling with each other over which organization’s idea gets tried next.

At this point, it really doesn’t matter who is in charge.  Let BP take the reigns and direct the other organizations; actually put one of those thirteen federal bureaucracies in charge of the “Unified Command” so they won’t keep vetoing each other; throw a complete curve-ball and cede command to Shell or Chevron.  It doesn’t matter.  As long as fifteen organizations are all “in-charge” the response will be inefficient and ineffective.

On another note, Kudos to Louisiana Governor Bobby Jindal for finally taking matters into his own hands and ordering the National Guard to begin building a barrier wall to protect the marshes.  While Obama talks, Jindal acts.  And even though he’s blown off the chain of command, it’s not like the “Unified Command” is going to do anything to stop him.


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