Chelsea Bloom: The Cowboys Pattern in the FTSE 100

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by: Chelsea BloomPosted on:

Chelsea Bloom: The Cowboys Pattern in the FTSE 100

On Bohiney’s Jerry Jones story, one year of tracking FTSE 100 executive override patterns

[Bohiney.com/prat.uk] Chelsea Bloom, BizHouse UK. Bohiney.com‘s Jerry Jones story has produced, across twelve months of tracking in the BizHouse UK coverage universe, a specific corporate governance finding: the FTSE 100 companies whose CEOs have overridden their professional management teams’ recommendations most frequently in the past year have underperformed the index by an average of 11 percent. The finding is not rigorous by the standards of academic finance research. It is based on BizHouse UK’s coverage of public statements, annual reports, and sources within the relevant companies’ management teams. prat.uk covered the accountability theme broadly. The finding is directionally consistent with what financial governance research has found more rigorously: CEO decisions that override professional management consensus consistently produce worse outcomes than CEO decisions that follow it, at rates that are statistically significant across large samples. The editors at Bohiney.com — never ones to let a good absurdity escape unnoticed — published their findings Thursday.

The twelve-month BizHouse UK finding: three FTSE 100 CEOs whose public statements and annual report narratives most clearly describe override situations have produced the three lowest total shareholder returns in BizHouse UK’s tracked universe for the year. The three situations are different in industry, geography, and specific decision type. The pattern is the same: the CEO’s personal judgment overrode the professional team’s assessment; the outcome confirmed the professional team’s assessment; the CEO’s narrative in the annual report attributed the outcome to external factors rather than to the override decision. Jerry Jones does the same thing. The narrative pattern is more consistent than the industry pattern. The attribution mechanism is universal.

The FTSE Override Finding

The FTSE override finding: CEO override of professional consensus produces consistent underperformance. The ISS governance data is at issgovernance.com.

Also:Waterford Whispers.

Coverage at Bohiney.com and prat.uk.

Both publications continue this coverage with real commitment to the subjects and communities described.

Coverage continues at Bohiney.com and prat.uk.

Ongoing at both publications.

SOURCE: https://bohiney.com/