Boomerang Bosses

August 26, 2009

Boomerang

Boomerang Bosses have been criticised for taking large displacement payouts only to move rapidly to similar jobs. But why is this necessarily bad?

The term boomerang boss was recently used in the context of public sector leaders in the UK who take large pensions only to be rehired rapidly into similar posts. The story follows on from ones about bankers receiving what are regarded by many people as far too-generous payoffs for their contributions to corporate failure.

LWD has already examined cases such as that of Fred Goodwin

I have argued that the payoffs, however outrageous, are not as simple a matter as they seem. I retain that view, even though I write this post shortly after paying a hefty charge for a transfer payment from my account in one part of a bank to the account of someone else in another part of the same bank. Our banks still retain crappy operational practices, and as long as they do they will retain their collective reputation of Albatrosses to the public wellbeing. But enough of this ranting.

The story this week [August 26th 2009] concerns other examples of corporate leadership actions which have attracted criticism. According to the BBC

The government is to investigate the cost of council chiefs who leave their councils with a big pay-off only to get another highly-paid council job.

There have been a number of cases where bosses have left with pay-offs after clashes with political leadership but then quickly return at another council. The Communities Secretary John Denham said it is not acceptable to give pay-offs due to clashes of personality. He said so-called “boomerang bosses” are undermining the public’s trust [and ] has asked the Audit Commission, which is responsible for monitoring local authority finances and value for money, to investigate.

Find the Culprit

We do not need to look at specific cases to notice the ‘find the Culprit’ mentality encouraged through Mr Denham’s reported statement. There are avaricious leaders out there, even in the Public Sector. (Or bosses, to use the old Labour term still popular among the more excitable voices of the Media). Something must be done.

What might be done about this?

A bit more considered thinking would be a good start. The hunt, blame, and punish route seems to be taking us away from considering the wider picture.

What are the forces which have some influence over the actions of public sector bodies? How might the actions contribute to the removal of executive leaders and to the departure arrangements? In other words, what’s happening to the processes of governance?

Mr Denham went on to say “It’s not acceptable for town hall chiefs and council leaders to agree expensive deals to part company just because they don’t get on or because they’d prefer to work with someone else”.

Agreed. I can’t help thinking that there will be examples of cozy deals cut. But the stories are likely to be a lot more about unresolved tensions between the executive and political players than about ‘not getting on’ or ‘preferring to work with somebody else’.

Anyone wishing to contribute to this debate would be welcome to express a view in these posts.

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