Last week, I posted my observations (musings?) relating to a colloquy that I had with Tennessee Governor Bill Haslam at an event sponsored by the C. Warren Neel Corporate Governance Center on The University of Tennessee’s Knoxville campus.  At almost the same time, and not at all related to my attendance at that event, I picked up a reprint of a recent article, CEOs and Presidents, authored by Tom Lin at Temple.  Tom and I often work in overlapping fields.  In particular, both of us have shown interest, from different perspectives, in substantially similar issues relating to corporate executives. 

I commend Tom’s article to you.  It provides a lucid and engaging comparison of CEOs and Presidents (as the title suggests).  (His analysis is, of course,  significantly more rich and nuanced than the reflections I shared in my earlier post.)  But Tom’s piece doesn’t stop there.  It goes on to critique the desirability of the “President as CEO” model based on the harms posed to both corporations and democracies and also highlights some important lessons we can learn from his study.

I do want to challenge Tom on one provocative statement that he makes in the article, however.  After critically commenting on the dangers of (among other things) government reliance on private industry and values in the accomplishment of its objectives, he observes that “[g]overnment and corporations are not actual or conceptual substitutes for one another, but are complements of one another.”  He lists examples and avows that both government and private industry are optimized when they collaborate.  

While Tom may be right about optimization (although I need some convincing on that point, his examples are intriguing), I disagree with the notion that government and industry cannot and do not, in fact, substitute for each other in regulating conduct.  This is not to say that one would ever fully supplant the other.  I will leave the articulation of that scenario to futurists and much more creative fiction writers than I . . . .  But the financial crisis and its aftermath, notably as described in the scholarship of Steven Davidoff Solomon and David Zaring (Steven’s book, their coauthored earlier article, and their coauthored recent article), amply illustrate that private industry can be and has been a sustitute source of financial regulation.

Regardless, I learned a number of things from reading Tom’s article.  Many of his political and governance insights are valuable.  In my view, the article is worth the read whether you’re interested in the political or legal governance aspects of the CEO/President comparison.