Using a Horse Race to Choose a New CEO

Horse racing is an ancient sport that continues to fascinate fans around the world. The grandeur of the top races draws spectators to witness a fusion of speed and strategy. The sport also has economic ramifications as it creates sustainable ecosystems including breeding programs and betting operations. While equestrian sports are most popular in the United States and Europe, many nations have developed their own breeds and races that contribute to the global popularity of this exhilarating sport.

One of the most renowned events in the world is The Prix de l’Arc de Triomphe. It is held annually in Paris, France and attracts competitors from all over the globe. It is considered to be the most prestigious race in the entire sport and offers a prize of $10 million dollars. The winner is usually considered to be a contender for the next year’s Triple Crown.

While some executives and governance observers are uncomfortable with the “horse race” approach, which involves an overt contest among several recognized candidates within a set time frame to become the next chief executive officer, the method has been a successful tool for many well-known companies. It allows a board to identify talented senior leaders and provide them with a sequence of leadership roles in which they can attain the competencies and seasoning required for the CEO position.

The first thing that a board considering the use of a horse race to choose a new CEO should consider is whether the culture and structure of the company are suited to this type of competition. If the success of the company’s strategy depends heavily on internal collaboration and resource sharing, an overt leadership contest may not be a risk worth taking. The board should also have a general understanding of the capabilities of its senior leadership and decide whether the executive that emerges at the end of the contest will be appropriate for the needs of the company at that time.

The American Thoroughbred racing industry was established by Colonel Richard Nicolls during the British occupation of New Amsterdam (now New York City) in 1664. Nicolls laid out a 2-mile (3.2-km) course and established organized races that followed the English model of prize money and championships. At that time, the hallmark of excellence for American Thoroughbreds was stamina rather than speed. The great mare Zenyatta, standing over 17 hands and weighing more than 1,200 pounds, was famous for her pre-race dancing routine in the starting gate. She reportedly felt claustrophobic in the small box and needed to release her energy. This is a common practice among big racehorses and helps them maintain their focus and speed during the contest.