Insidious trend

So let’s say you’re a former CEO who moves into private equity. Before doing so, you help run a major company into the ground by leveraging up via acquisition when that same company needed to be paring down costs and changing its processes. Granted you did cut costs when losses started to mount. But that was only after the fact when you had no real choice.

Fast forward a few years later. You’re still hanging out in private equity, tapping the rolodex for deals. Another major company from your homeland comes calling with a board seat. A few years later, you’re made Chairman to calm things down after that same company goes through a major proxy fight.

Jacques Nasser, a.k.a. Jac the Knife, must be feeling pretty good right now. BHP Billiton, the Australian mining conglomerate, has just turned to the former Ford CEO to help sort out its future path. Here’s the announcement:

Some might call this failing upward. Others might yawn and say “business as usual.” A few might even have the courage to say, “eminently qualified for the job. Great leader,” which is what Cerebrus basically said about Bob Nardelli in a recent statement after naming Nardelli to a key post following the Chyrsler bankruptcy.

This type of revolving door is an insidious trend that really needs have a door stop put in place. No failed CEO of a major company should go on to serve as Chairman of another major company. Period. End of story.

Note: BHP told the New York Times that they consulted with Heidrick & Struggles on the selection of Nasser and KMPG on a secret ballot distributed among board members.

Next thing you know boards will be playing duck, duck goose to ratify these types of decisions.

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