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CEOs always have a difficult job, but in today’s times of economic uncertainty, tough competition, increasing investor scrutiny to hit performance targets, relentless media cycles and disruption from all sides, it’s getting harder. With all that pressure, a positive and trustworthy relationship between the CEO and board of directors is vital. Earlier this month, the National Association of Corporate Directors released a playbook for both boards and CEOs to deepen this relationship and build trust. NACD formally introduced the report with a roundtable discussion at its annual Directors Summit. A 25-member Blue Ribbon Commission wrote the report, composed of current and former CEOs and board members, co-chaired by Wayne Peacock, former CEO and president of USAA, and Dona Young, former chair, president and CEO of the Phoenix Companies. To begin with, the board and CEO need to build a trust foundation by defining their roles, including how they will work together and how the CEO and board leader can partner. Then they need to operationalize that trust, communicating beyond meetings, enhancing evaluations of one another to reinforce intended behaviors, using executive sessions to help build accountability and transparency, and prioritizing the CEO’s overall well-being. Next, spell out how to leverage that trust to maximize the board’s value as a strategic advisor and assess board composition to align with what is needed for strategy and value creation. At the roundtable discussion, Peacock said that today’s business environment is dynamic, filled with urgency and uncertainty. “If you build trust, you’re operationalizing that on an ongoing basis, then you have the ability to move at a faster pace than you would otherwise have,” he said. “I think also, from a very practical standpoint, whether it’s the noise…or the disruption from other changes that are happening, the ability to separate the signal from the noise as a company today and focus on: ‘What is our mission, what are the values we stand for, what are the things we can control in this environment, and how do we build scenario planning around what could be a wide set of outcomes going forward?” become part of the skills and expertise of senior management in collaboration with the board. Which comes back to: If we built those strong trust foundations, and then we have the ability to use the best thinking of everyone on the board and senior management, we will be better prepared to adapt and change in a much more dynamic environment.” Another important aspect of the board-CEO relationship is succession planning. Sometimes it’s easy, but there are some legacy CEOs—often founders or those who have been there long enough to believe they define the company—who can be difficult to budge from the corner office. I spoke with Shawn Cole, president and founding partner of executive search firm Cowen Partners, about what CEOs should be thinking about succession planning, especially if the “legacy CEO” description hits close to home. An excerpt from our conversation is later in this newsletter. This is the published version of Forbes’ CEO newsletter, which offers the latest news for today’s and tomorrow’s business leaders and decision makers. Click here to get it delivered to your inbox every week. ECONOMIC INDICATORS A customer shops at an H-E-B grocery store in Austin, Texas. Brandon Bell/Getty Images As the federal government shutdown enters its fourth week with no end in sight, the drag on the economy—both now and in the future—is becoming apparent. Delayed government inflation data for September was released on Friday, revealing that inflation last month continued to tick up. Prices were up 3% compared with a year ago, and had risen 0.3% since August. And consumer sentiment continues to decline, with the University of Michigan’s monthly survey dropping 2.7% to a score of 53.6. According to the survey, Americans’ views on current economic conditions fell to the same level as August 2022, when inflation was 8.3%. An AP-NORC poll last week found that just 32% of Americans viewed the economy positively. Focusing only on businesses, Forbes senior contributor Simon Moore writes that this shutdown is likely to suppress Q4 GDP growth by as much as 0.5%, though not completely neutralize growth or turn it negative. How much it will hurt is not known, especially since negotiations to tend the shutdown do not appear to be underway. The most recent government shutdown in 2018 and 2019, which was also the longest on record, had an impact of $18 billion, according to the Congressional Budget Office, Moore wrote. Much of the planned spending for that period happened anyway, but was delayed, so the lost spending was estimated at $3 billion. Some economic policy changes may be close on the horizon, though. The Federal Reserve’s Open Market Committee meets later this week and will discuss interest rates. According to CME FedWatch, on Monday morning 96.7% of analysts are expecting a quarter-point rate cut this week, bringing rates down to between 3.75% and 4%. But that’s not necessarily great news. Forbes senior contributor Erik Sherman writes that the conditions may be ripe for stagflation—when economic growth is tepid, but inflation and unemployment are both rising. HUMAN CAPITAL President Donald Trump signs executive orders, including the one introducing a $100,000 fee for H-1B visas, in the Oval Office last month. Andrew Harnik/Getty Images Last week, U.S. Citizenship and Immigration Services issued some guidance on President Donald Trump’s controversial new $100,000 fee for new H-1B visas. Forbes senior contributor Stuart Anderson writes the fee applies to new petitions for the visas filed at or after 12:01 a.m. September 21, as well as for requests for consular or port-of-entry notifications, or pre-flight inspections for noncitizens already in the U.S. It does not apply to people who are already legally in the country and requesting amendments, changes of status or extensions of stay—so the fee would not be required for a person with an F-1 student visa who is applying for an H-1B visa. Additionally, the guidance states that people with H-1B visas may leave and re-enter the U.S. However, Anderson notes, the language in the new guidance seems to be more restrictive than in Trump’s executive order about the fee, and appears to leave little room for exceptions. The new fees are already impacting job offers, even for some of the world’s largest companies. Walmart paused corporate offers to candidates requiring H-1B visas, Bloomberg first reported. The retailer currently employs about 2,390 H-1B visa holders, and a spokesperson told Forbes that Walmart “is committed to hiring and investing in the best talent” and will do so “while remaining thoughtful about our H-1B hiring approach.” The hike in the visa’s fee is being challenged in court. The Chamber of Commerce filed a suit earlier this month, saying the huge hike exceeds the president’s authority and “would inflict significant harm on American businesses, which would be forced to either dramatically increase their labor costs or hire fewer highly skilled employees for whom domestic replacements are not readily available.” Photo illustration by Cheng Xin/Getty Images Another giant shakeup in the media world could be in the near future. Last week, media conglomerate Warner Bros. Discovery announced it would launch a “review of strategic alternatives to maximize shareholder value.” These could include selling the entire company, selling off either of its two major companies—Warner Bros. or Discovery Global—or going forward with its already-announced plans to split into separate entities, one for its streaming and studio assets, and the other for its global networks, including CNN, TNT Sports and Discovery. The move was likely precipitated by a rumored bid last month from Paramount Skydance to buy the company. The multibillion Paramount Skydance deal had been pending before regulators for a year, and was completed in August after the company made concessions to President Donald Trump’s priorities. The rumored bid has so far not been successful, and Forbes senior contributor David Bloom writes that’s probably a good thing, considering Warner’s movie studio has not seen sweeping box office success in the recent past. Another rumored suitor is Netflix, which issued its quarterly earnings report the same day Warner Bros. Discovery announced its review. Bloom writes that much of the discussion on the earnings call was about whether the streaming giant would buy the movie and cable network company. The public answer, at least for now, is no. However, because the broadcast industry is becoming increasingly consolidated, any potential buyer of the company would likely face regulatory scrutiny. Forbes senior contributor Peter Cohan looked at potential suitors for Warner Bros. Discovery and their likelihood to be able to complete the transaction—looking at both regulatory hurdles and ability to pay. Cohan reported that if the company actually does put itself up for sale, analysts see less obvious suitors with fewer antitrust issues—including Amazon and Apple—potentially making a bid. TOMORROW’S TRENDS How CEOs Who Don’t Want To Go Should Think About Succession Cowen Partners President and Founding Partner Shawn Cole. Cowen Partners CEOs are critical. They set the agenda, establish the business tone, develop strategies for the future, serve as the lead business representative and make major decisions. However, executive search firm Cowen Partners president and founding partner Shawn Cole said, no CEO is actually synonymous with the company they lead. All CEOs, from founders to longtime leaders, should prepare for their exits—even if they don’t want to. I talked to him about what all CEOs—especially those who may associate themselves too closely with their role—should think about succession planning. This conversation has been edited for length, clarity and continuity. There are many reasons legacy CEOs stick around and, at least externally, don’t talk about succession planning. What could make them at least start to think about it? Cole: Business in general is changing faster on a more regular basis than ever. Maybe [a CEO in this position would start] recognizing that I may not be the best captain for the ship anymore, that it is evolving faster than perhaps someone of that profile could keep up with. I also think, unfortunately, that it seems like it’s more of a lifestyle business. It’s not a full-time job, it’s a prestigious title to hold. Are you really giving it 110%, or is it really fun to travel the world and go speak at conferences, engagements or whatnot? Are you a figurehead or are you the CEO? If you want to tie it to wealth and shareholder value, what could be realized by having someone with a bit more energy and a little bit more appetite or knowledge of current events and trends? What would that look like for the share price? I would watch for more and more people dying in the seat. We’re getting to a point of no return, going back to mortality. Do you want that to be your legacy? Do you want your legacy to be total effing chaos when you left—or when you passed away—because you didn’t plan for a successor? Also [think of your] family. Do you really want your final years to be working or do you have other things you’d like to do? In this kind of scenario, where should succession planning start, both on a board level and an individual level? At a board level, you need to start identifying what a transition looks like, what a handoff looks like, what a successful on-ramp of your successor looks like, and who that successor is. The other aspect is it can sometimes turn into that TV show Succession, where it just destroys your C-suite because everyone’s been promised something. [It’s important to] have a clearly defined—internally, externally, shared or otherwise—plan for a successor so that you’ve got your number one and two at the same time, and you align that to your timeline. A lot of succession planning is like the anointment of a successor, and maybe it needs to be a lot more objective. There could be scoring involved. You could hire a consulting firm to assess internal and external candidates—because if you have a legacy CEO, most likely your No. 2 probably isn’t as strong as an outside candidate. You probably already lost some stronger [internal] candidates. They went on to somewhere else where they could have an opportunity to be CEO. Oftentimes these legacy CEOs’ internal pipeline isn’t that strong because they don’t foster strong internal talent. They foster yes people. What advice would you give a legacy CEO about looking at succession and planning? Look to the transitions that have failed, and ask yourself if you want to be the next one. Do you want that to be your legacy? Sometimes the narcissism, the selfishness [makes it appear] they seemingly don’t care or [could say], ‘I did such a good job. It’s impossible to find my successor.’ No. You set this up for failure because it was a knee-jerk response. There was no pipeline. This was not in the works for years. We had to go outside to someone that had no idea what our business was about. I would just ask: What do you want to be affiliated with? Do you want to be affiliated with a smooth handoff and a legacy of success? Or do you want to be the person that retired and it went [south] for lack of planning? What do you want the Wikipedia page to say? COMINGS + GOINGS Consumer device insurance firm Asurion appointed Guru Gowrappan as its next chief executive officer, effective October 27. Gowrappan was most recently president of Viasat, and he will succeed Tim Stadthaus, who is transitioning to another role with the company. Construction aggregates supplier Vulcan Materials Company promoted Ronnie Pruitt to its chief executive officer role, effective January 1. Pruitt currently works as the company’s chief operating officer, and will succeed Tom Hill, who is transitioning to executive chairman of the board. Logistics and transportation provider Ascent Global Logistics named Rob Walpole as its new chief executive officer, effective October 23. Walpole most recently served as CEO of Custom Goods Logistics, and held leadership roles for Delta Cargo and DP World. STRATEGIES + ADVICE You may not be in favor of the Silicon Valley-style 996 workweek, but it is really difficult for a successful CEO to spend just 40 hours a week working. Being in a job that requires more of your time and thought means you need to invest more time on careful work-life integration. Layoffs can be an unfortunate reality when businesses need to change their strategy or free up funds in an uncertain economy. But many workers say leaders at their business lack empathy when laying off employees, which can negatively impact how the workers who stay feel about their employer. Here’s how to show more empathy and keep a bad corporate situation from becoming worse. GameStop’s stock surged Monday morning after the White House’s X account reshared a post from the retailer and added an AI-generated picture of President Donald Trump looking like a character from which video game? A. Minecraft B. Super Mario Bros D. World of Warcraft See if you got the answer right here. Got a tip? Share confidential information with Forbes. Editorial StandardsReprints & Permissions
