Governance and the Horse Race

A horse race is a form of organized competition in which competitors use horses to win a prize. It is a common technique for selecting senior executives and other high-level personnel in many countries and cultures, including the United States, Australia, England, Ireland, France and Germany. Many companies that employ the horse race approach are highly regarded for their leadership, innovation and success. However, some directors and governance observers are uncomfortable with the overt contest that a horse race entails, fearing that it could distract from company operations.

The horse race is the most common method of choosing a new chief executive officer (CEO). In this system, an overt competition pits several recognized candidates against each other, with the winner becoming the company’s next CEO. This type of leadership contest may have a number of negative impacts on the organization, depending on how it is conducted and the final choice made.

A horse is a large, muscular animal that has been trained to run fast. A thoroughbred, or racehorse, is a breed specifically bred and trained to run fast in races. The sport of horse racing has a long history in many cultures and involves betting on the outcome of races. A horse race can be held on a variety of surfaces, including dirt and grass. It can also be run at varying distances and under various terms, such as an overnight race where entries close just prior to the race or a stakes race in which horses are entered on the basis of their performance in previous races.

Horses are ridden by jockeys, who are also known as mounts. The job of a jockey is to guide and control the horse, helping him to achieve his potential. The sport is dangerous, and it is important for a rider to be able to read the behavior of his horse, assessing whether the animal is tiring or exhibiting signs of illness.

During a race, stewards and patrol judges are on the lookout for rule violations. The horse must make it over all obstacles without a fault in order to finish the race. The steeplechase is a particularly arduous and dangerous type of horse race, and the sport dates back at least to the 5th century bc.

Advocates of the horse race approach say that it demonstrates that the board and current chief executive are confident that the company has the internal talent to compete for the top position. They also contend that the process encourages a culture of succession planning, where individuals can see a path to future roles. When done well, a company’s horse race system may result in the selection of a powerful leader and also inspire other managers throughout the organization to vie for more senior positions. The critics of this strategy, however, point out that it can take a while to select a winner and that the process may distract from operating the business. In addition, the horse race approach can engender conflict between people who have aligned themselves with the competing candidates.