LETTERS: Changing Name of CEO on Company Like Bain No Oversight

Dear Nashua Patch,

Mr. Romney’s reactions on CNN to comments about his leave from Bain suggest he isn’t ready for the job he is now running for!

Changing the name of a CEO is no oversight for a private capital firm like Bain. Their business is built around names and reputations. The reputation of the management is even more important than the reputation of the firm. And the role of the CEO is the most critical of all. Even for the relatively small investment I was recently involved in, investors insisted on clarity and certainty on the position of the CEO and the key board positions. Our company had to certify that key staff were in place and their labor conditions unchanged, and that even in the last few weeks between the due diligence and the closing of the investment there were no substantial changes made.

An investment company like Bain therefore does not “overlook” the position of his CEO. Even if the CEO is too busy to check, there are lawyers and staff that make sure there are no mistakes made. Any misstatement exposes the company to lawsuits and liabilities either from its investors or its clients.   Investors give money to the names backing the firm.  Clients come to a firm because of its people. They of course realize the CEO might not be involved directly in any specific client relationship or strategy session – he usually isn’t.   But his reputation still backs the firm, providing important assurance that he trusts the team and trusts their work.  And that his personal reputation remains on the line as long as he lends them his support.

Staying on as CEO during a leave of absence is no formality. It ensures that the CEO can come back after finishing the temp  job. Mr. Romney did that among others after his run for the senate.  But keeping the CEO in place also links the firm to the high profile job the CEO is doing. Such a job brings in new clients.   It good for the company. And of course the firm also rewards the CEO for his continued support during his leave of absence.

Keeping a high profile CEO as Mr. Romney does require from Bain that his values and concerns are protected, otherwise the firm will harm his personal reputation. Mr. Romney therefore had to trust the Bain team. Combined with the possibility that he might return after his temporary job, this means that the values of the CEO are reflected in all the work of the firm. Values like working hard to ensure that results are achieved. And of course protecting the interests of the investors  and focusing in the best possible financial results.

Examining the behavior of Bain is therefore a valid line of inquiry when core values are increasingly what differentiate the two candidates. Both Mr. Romney and  Mr. Obama are obviously bright, smart and hard working. Both have demonstrated great competence in the areas of their interest – the President by ending wars, stopping economic collapse and adopting a healthcare solution.   The Governor by turning companies around , making his investors very wealthy and introducing the same sensible healthcare solution.

If Mr. Romney can’t take responsibility for the actions of a company that listed him as Chairman and CEO, it seems a fair question whether he is ready to be Chief Executive of the nation.  Day to day involvement in decisions is not going to be possible there either. If Mr. Romney thinks he is only responsible for those government actions he is personally involved in, then he clearly misunderstands the nature of Presidential responsibility.

Even more then the Olympics, the Presidency is a full time job. Mr. Obama had to rescue GM at the same time he was ending the war in Iraq. He had to fight in Afghanistan, while hunting for Bin Laden. He had to rescue the economy while building a new healthcare system. It's all about multitasking. Being good at one job isn’t good enough. You have to be able to lead in a range of different areas. The Governor claimed that he was to busy with the Olympics to keep track of what was happening at Bain. If Mr. Romney can’t do two jobs at the same time then he isn’t ready for the Presidency.

Sincerely,

Alysha Tierney

Manchester, NH