This is our 4th and final episode dissecting the HBO show Succession from a corporate governance perspective. It has been a lot of fun delivering this series. For this episode, we are joined by Joe Nocera, a distinguished business journalist and author known for his insightful and often critical views on various aspects of business and economics. Joe’s career in journalism has been marked by various notable roles, including at leading publications such as Esquire, GQ, Fortune Magazine, NYT and Bloomberg. Kate O’Leary, the Global Executive Litigation Counsel at GE, also comments from the perspective of an experienced in-house lawyer who deals with governance challenges in the real world. We covered issues from the first season of Succession on E98 (in May ‘23), second season on E102 (in June ‘23) and third season on E109 (in Sept ‘23). If you have not heard those episodes, please feel free to check them out. If you like this show, please consider subscribing, leaving a review or sharing this podcast on social media. You can also now contribute as a Patron on the link patreon.com/BoardroomGovernancePod and subscribe to the Boardroom Governance Newsletter at evanepstein.substack.com This podcast is sponsored by the American College of Governance Counsel.
*Prior episodes reviewing Succession:
0:00 -- Intro.
2:12-- About the podcast sponsor: The American College of Governance Counsel.
2:58 -- Start of interview.
3:54 -- On the influence and leadership style of Logan Roy. The "ultimate corporate governance challenge."
6:41 -- Comparing the (fictional) Roy family with the (real) Murdochs and Sultzbergers. "Why is Logan trying to sell Waystar? The answer is simple. He knows his kids can't cut it. So, his way of getting out of this whole dilemma is to sell the company, give the kids billions of dollars, you know, as their share for their stock, and then let them all go their own way."
09:47 -- On dual-class share structures. "[In the media business] just because you have dual shares doesn't mean you will always be protected from the vagaries of the marketplace." (example: the Bancroft family with the WSJ).
13:06 -- On the role of media and politics. Joe Nocera: "My line on succession is using succession to understand corporate America is like using the Simpsons to really understand small towns."
18:42 -- On corporate money in politics: "Forget Presidential elections. The real thing that happens in real life is that companies give lots of money to congressmen and senators who are on committees that they care about and who are willing to do their bidding. That's how it works. And that's why the little guy always gets screwed in these things, because they don't have the potency. They don't have the money. They don't have the access. And in terms of influence, it's not just media. It's all kinds of companies that are doing this for their own interest. And that's the way the world works. Is it nice? Is it good? No, not necessarily, but that's how it works."
19:57 -- On fraud and stockholder litigation. The overstating of subscribers in India by GoJo.
24:05 -- The role of the board of Waystar Royco in the takeover negotiation with GoJo. The example of Twitter acquisition by Elon Musk, and HP-Autonomy. Joe Nocera: "Companies overpay all the time because the CEO wants to build his empire, because they think there's something there that turns out not to be there, because they're in a competition with another company and they got to have this victory. Overpaying is very normal and then you have these multi-billion dollar write-downs blah blah blah."
28:23 -- Comparing Lukas Matsson to Elon Musk. "The rise of the ungovernable CEO."
30:34 -- On obstacles to women in the workplace. The cases of Shiv, Geri and Ebba. Kate: "It's an extreme version, but these are real issues that real women face all the time. I don't know that there's a corporate governance solution to it, other than culture, right? You know, it all comes back to culture and how you build culture."
36:35 -- On corporate culture: Joe: "In the modern age, the Rupert Murdochs and the Logan Roys are anomalies. I mean, you've got a situation now where David Solomon at GS is being widely criticized. Why? Because he's a harsh boss, he's a brutal boss, he makes demands, he's not an empathetic person. And nowadays companies want leaders that can nurture and lead by example and can get people to do things because they want to do them for the person or the company rather than they have to. And so, and then, you know, nowadays they can't even get the employees to come to work."
39:12 -- On ESG and the politicization of corporate governance. Joe: "Why did the ESG come along in the first place?
A lot of the reason is because the employee base at a company like Kellogg's, or Procter & Gamble, or Xerox, or IBM, they're mostly socially liberal. They're pro-choice. They're pro-environment. They're pro-BLM. And a lot of this movement began in the first place because companies wanted to make their employees happy. They wanted to give their employees a sense of a higher purpose than just, you know, banging out copier machines. And so ESG evolved. You go to a company like General Mills or Kellogg's and you walk down the aisle [...]And all on the walls, you're going to see, you know, come and help build a house for the homeless next Saturday. Or, you know, we're going to be the greenest company in the world in five years. Here's what we need to do. Or blah, blah, blah. People inside these companies are not complaining about it. They like it. [T]he conservative movement has made a big deal about this and they've gone after Larry Fink at BlackRock, but to me, 90% of it is bullshit. It's just, you know, ESG is a way to make your employees happy. That's all it is. And for the conservatives, it's a lovely way to bash corporations."
43:54 -- On the last boardroom scene, voting for the GoJo takeover.
46:36 -- Take-aways for corporate directors from the Succession show. Kate: "I think it's a tremendous cautionary tale for directors and officers and leaders of companies in terms of the core part of governance, which I believe is, how do you make decisions? How does a corporation make decisions?" "People, process, policies." "What's the structure for decision making? Who gets to make the decision? Joe: "Of the many tasks a CEO has, one of the most important is to find his successor [...] a CEO should have somebody lined up."
52:30 -- Final thoughts on the show. Joe: "I do think that some founders subconsciously want their company to fail after they're gone. They want this idea that only I could have built this and nobody can succeed me and do it as well as I did. And that's what I think was going on in season two. And I think maybe that's what's going on throughout Logan's, the four seasons that we watched Logan." Kate: "Logan Roy did nothing to make his children the kind of serious people who could take over for him. He thought there was only one him and the company dies with him. And it turns out that's probably kind of true."
Kate O'Leary is the Global Executive Litigation Counsel at General Electric.
Joe Nocera is a distinguished business journalist and author.