Unstoppable Top Executives And The Forces Of Restraint

29 Mar 2018. Bob Kaplan

It's always a problem when too much power is concentrated in the hands of the top person. 

That's almost a given in start-ups run by the founder. Inevitably, founder-CEOs—even the "good guys"—look upon the organization as their baby and feel free and entitled to treat it as they see fit. If they act up and even rob people of their dignity, well, who's to stop them? Likewise if unilaterally, consulting no one, they make bad hires or questionable acquisitions; and if their values or instincts rebel against a sorely needed change to the organization, who's to force them go along with it? As one founder-CEO's direct report told me, "He does anything he wants."  Unfortunately, in my experience that is an all too common refrain. (See my article, "Founder-CEOs Who Defeat The Purpose: Can Nothing Be Done?‎," issued back in 2014.)

Of course, founder-CEOs are just a special case of the prototypical all-powerful CEO whose potential offsets to that power have lost their teeth.

But nowhere is this problem more serious and consequential than in a country's government. 

History had made the framers of the U.S. Constitution acutely aware of this risk. England's absolute monarchy had evolved gradually, starting in the 1200s with the Magna Carta. In the mid-1600s, the "royal prerogative" in the hands of Charles I had taken a tyrannical turn, and in 1649 he was beheaded for his trouble. For twelve years, while a civil war raged, the throne sat empty. In 1688, King James II was overthrown by Parliment in the "Glorious Revolution," leading to the Bill of Rights of 1689.

With its newfound power, Parliament promptly stripped the crown of its authority to take people's property at will. That action along with other liberalizing changes that were made to the country's financial system spurred initiative, investment and innovation. And that led several decades later—in England—to the Industrial Revolution and economic growth that the world had not seen for many centuries.

With history as prologue, when the framers convened in Philadelphia in the summer of 1787, arguably their highest purpose was to design a government that restricted the power of the head of the executive branch. The last thing they wanted was anything resembling a king. To that end, among others, separation of powers among the three branches of government was put in place; checks and balances were built in. 

In Alexis de Tocqueville's landmark  book, Democracy In America, based upon his extensive tour and his observations of 1830s America, the French political theorist made much of the Constitution's "counterweights," a feature so conspicuously and fatefully absent from a royal monarchy. "In absolute monarchies the ruinous principle is the unlimited and unreasonable extension of the royal power. Any measure, therefore, which takes away the counterweights, left by the (U.S.) Constitution to balance this power, is radically bad, even though its effects may long seem negligible." Radically bad.

Constitution-mandated counterweights notwithstanding, fear ran high at the time that a U.S. president once in office would promptly act like a king. Keep in mind that the first central government, formulated in the Articles of Confederation and adopted in 1777, had instituted a central government so weak that it had no executive branch whatsoever (partly to protect "States' sovereignty").

But the fear that the first president would be king proved unwarranted in George Washington's case. He abhorred the trappings of royal power and, fearing "despotism," he stepped down voluntarily, of his own volition—despite the urging of many people for him to stay on—after his second term believing it the right thing to do for the nascent republic. Perhaps Washington was moved to keep himself in check by his dim if realistic view of human nature: "Man," he said, "is motivated by self-interest and self-love."

Appearances to the contrary, the U.S. system of government has always been a fragile experiment. The Constitution as we know it only came into being against steep odds. The delegates to the Constitutional Convention, charged with merely revising the Articles of Confederation, daringly tossed it aside. And then the Constitution very nearly failed to get ratified by enough states (9 of 13). And what were the chances that a 55-person ad hoc committee would formulate an original and sound system of government and agree to it?

It has never been a sure thing that democracy in America would continue as originally constituted. The built-in checks and balances might at any time prove too diminished and weak to contain and counteract any president driven by excessive self-interest and voracious self-love. Personally, I have faith that the government's corrective mechanisms will prove to be up to the sternest test, but what do I know about what the country's future holds?

The distribution—rather the mal-distribution—of power at the top of any organization, even between parents, so fateful and damaging, gets my attention every time. Equally compelling: How might that possibly be remedied? 



Miracle in Philadelphia by Catherine Drinker Bowen

Empire of Liberty by Gordon S. Wood

Alexander Hamilton by Ron Chernow

Why Nations Fail by Darren Acemoglu and James A. Robinson

The Birth of Plenty by William J. Bernstein


© Kaplan DeVries Inc.