The Great Debate UK
Steve Tappin on what makes a CEO tick
Being a CEO should be one of the best jobs in the world, argue the authors of a new book.
“It offers the chance to make a real difference,” Steve Tappin and Andrew Cave write in The New Secrets of CEOs: 200 Global Chief Executives on Leading.
“However, real life for most CEOs is tough and many are not enjoying it.”
The authors interviewed 200 CEOs for the book, which includes profiles of such leaders as Tesco’s Terry Leahy , Avon’s Andrea Jung, Xstrata’s Mick Davis, Kraft’s Irene Rosenfeld, Haier’s Zhang Ruimin and Cisco’s John Chambers.
CEOs are divided into five “distinct categories” characterised by similar leadership styles.
In the following video interview, Tappin, who heads up the CEO counselling firm Xinfu, discusses some major issues confronting top leaders at global firms since the financial crisis of 2007-2009, and shares his views with Reuters on how BP’s Tony Hayward should manage the the Gulf of Mexico oil spill crisis.
from Commentaries:
Xstrata waiting plays into Anglo’s hands
Mick Davis is sticking to his guns over his proposal for a nil-premium merger between Xstrata and Anglo American. And well he might. The gap between the two mega-miners in terms of market capitalisation is tantalisingly close to zero. But Davis should not think that this means a prolonged bear hug is going to persuade them to accept the miner's proposal. Davis approached Anglo when the market caps of the two companies had almost converged, following a rise in Xstrata's share price and a fall in Anglo's. Following the offer, the gap widened in anticipation of a premium from Xstrata or a white knight bid from another mining group. So far neither has materialised and the gap has closed again. Now Anglo and Xstrata have both reported first-half earnings, Anglo, valued at 25.6 billion pounds ($43.4 billion), is trading at a premium of roughly 5 percent to its antagonist. Xstrata thinks its offer to split the $1 billion of merger savings it believes it can extract down the middle is fair because (whisper it softly) Anglo is poorly managed. Of course Davis can't say this openly because the deal is "friendly" but the focus on efficiencies and savings is designed to make the argument for him. Meanwhile, Anglo's riposte is to stress its own cost-cutting prowess. It told investors that it expected to be ahead of schedule on its plan to extract $2 billion of stand-alone savings by 2011. Efficient, see? Moreover, Anglo is arguing that Xstrata has timed its pounce at a moment when two important subsidiaries -- Anglo Platinum and De Beers -- are cyclically depressed. These two entities are collectively worth an estimated $15 billion, more than a quarter of Anglo's $58 billion enterprise value. Xstrata's focus on coal -- where sales have surged because of Chinese demand -- has conversely helped inflate its value. Davis recognises the pivotal role that Anglo's newly-appointed chairman John Parker will have in deciding how this battle plays out, pointing out that Parker needs time to look at the business he is inheriting before making any move. Anglo's shareholders may not be pushing Parker to invite Davis into immediate talks, but they will want to know how easy it will be to fix these assets, whether their value can be pushed up substantially, and whether the group has the management to deliver this. If Parker can't come up with a convincing answer, that may again raise questions about Anglo's future as a standalone business. At that point, Davis may have another bite at the cherry. It is significant that Parker hasn't forced Davis to "put up or shut up" in UK bid parlance and either make a bid or push off for six months. Perhaps he sees value in having Xstrata as an option to get Anglo's chief executive Cynthia Carroll working her socks off to turn Anglo round.
Time for Anglo to reveal its hidden gems
– Alexander Smith is a Reuters columnist. The opinions expressed are his own –
Anglo American is sitting back after rejecting Xstrata’s nil-premium merger proposal.
The bid isn’t sufficiently compelling to force Anglo to the table or into the arms of a white knight. So the group is logically seeking to string things out while assembling its case to remain independent.
The market has bolstered Anglo’s case a little, widening the miner’s premium over its rival and indicating that Xstrata will have to come back and offer more if it wants to take things further. Anglo’s challenge is to maximise the size of that differential so it can either put itself beyond Xstrata’s reach or force the bidder to pay a fat premium to achieve control.
Xstrata boss, Mick Davis, has essentially acknowledged that the nil-premium proposal is effectively dead in the water, noting wryly that it is rare for nil-premium mergers to work “if the other party does not want to play with you”.
Anglo is in no mood to play, making it abundantly clear what it thinks of Xstrata’s proposal — both in terms of value and strategy. The group has let it be known that it looked at the possibility of doing deal with Xstrata 18 months ago and rejected the idea, not least because it did not want to change its business mix. And only three weeks before Xstrata’s approach, Anglo’s board had run a slide rule over a deal — the decision was the same.
So what should Anglo do to bolster its defence?
