Good morning.
I predicted here in April that Disney CEO Bob Chapek “will be out within a year”—so that’s at least one I got right. But the question remains: did Chapek get pushed out because of problems with his “stakeholders”—particularly in reaction to Florida’s so-called “Don’t Say Gay” bill—or was his ouster a standard case of failing to meet the demands of shareholders?
I think the correct answer is: both. Shareholders were definitely agitated. Activist funds including Dan Loeb’s Third Point and Nelson Peltz’s Trian had bought into the company and were pushing for change. Disney’s most recent earnings report was lackluster. And the stock price was down 40% this year.
But Chapek’s mishandling of the Florida situation—first saying nothing, then stepping into a fight with the state’s politicians—surely played an important role. Chapek’s success as CEO depended on his skillful handling of a broad array of stakeholders, including the talented Disney creatives who were deeply offended by the Florida law; the politicians who passed that law; the preening activists like Peltz and Loeb who smelled blood in the water; a predecessor who didn’t make the job easy for his successor; and even the doubts of some of his own top executives. A CNBC report yesterday said the company’s CFO, Christine McCarthy, was one of those who expressed a lack of confidence in Chapek, helping to ensure his fall.
The lesson is that today’s CEOs face pressure from an ever-expanding roster of people whose support they ultimately need to succeed. It’s not an easy job. More than ever, it requires a mix of empathy—willingness to listen to disparate voices; humility—a recognition that you don’t have all the answers; and yet confidence—the ability to ultimately chart a clear and convincing course after listening and fully taking into account conflicting stakeholder views. Chapek failed the test on all three counts.
By the way, mid-term election results in the U.S. are likely to make the CEO job even more difficult, with congressional “oversight” heading into partisan overdrive, and CEOs stuck in the center. My friend Bruce Mehlman predicts that in the New Year, we will see “a CEO get subpoenaed by Senate Democrats asking ‘Why are you so slow in decarbonizing when the planet is melting,’ and then the next day get subpoenaed by House Republicans asking ‘Why are you so woke that you put ESG BS ahead of shareholders.’” That sounds right to me.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
