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In this series, we break down the jargon and explain a popular investing term or topic. Here is the chair.
Nothing to do with the furniture…
You are not right. But there has been a new development in the debate over what name should be used for the executive who occupies the highest seat at the boardroom table.
Is “president” the appropriate term? Or is the term “chair” more appropriate, since the person taking on this role may now be a woman?
What’s new?
A Bloomberg study has been the incentive. This research shows that 185 of the companies in the US S&P 500 index use ‘president’ or ‘chairman’, three times more than in 2020.
Boardroom battle: Research shows 185 of US S&P 500 companies use ‘president’ or ‘chairman’, three times more than in 2020
Among those that have made the change are three major banks: Bank of America, JP Morgan and Wells Fargo. But Goldman Sachs, Morgan Stanley and Citi still use the president, although Citi has a female CEO in Jane Fraser.
Nearly half of tech groups use the term “chair,” including Alphabet, Amazon, Meta and Tesla.
So ‘president’ could become redundant?
Not so fast. As the Bloomberg study reveals, in recent months there has been a decrease in the number of companies that decide to order a change of ‘president’.
However, the reasons for this are much broader than the simple convenience of gender-neutral language.
There is a growing backlash against corporate “woke” behavior, with more politicians and business owners questioning the effectiveness of DEI (diversity equity inclusion) strategies that were promoted as a way to boost employment and other opportunities for minorities.
Who are the main spokespersons in this debate?
Elon Musk, the head of Tesla, is the business world’s loudest objector, arguing that “DEI is just another word for racism.” He maintains that DEI policies “discriminate on the basis of race, gender, and many other factors” and are therefore “immoral and illegal.” What its president Robyn Denholm thinks about this position has not been recorded.
Any other key figures?
Billionaire hedge fund boss Bill Ackman, founder and chief executive of the Pershing Square investment fund, which is a member of the FTSE 100, last year led a high-profile campaign to oust Harvard’s president over anti-Semitism on campus. of the University. .
Pershing Square has a president in Anne Farlow. But most investors are likely to be less concerned about the choice of title for this board seat than about the discount on the trust. Its share price is at a 28 percent discount to the value of its net assets.
Is president still the most common term in the United Kingdom?
Having been around since the 17th century, it seems likely to be around for a while yet. For example, the term president will continue to be used at John Lewis; This week, Jason Tarry replaced Dame Sharon White. However, if a woman is appointed to the position, there appears to be a preference for the “presidency.” BAE’s Cressida Hogg and Barratt’s Caroline Silver are ‘chairs’. In 2022, then-Chancellor Kwasi Kwarteng rejected a multi-agency call for the Government to replace “president” with “president”.