Five great insights you might have missed from the latest Management Consulting Journal

Written by Ian Wylie Tuesday 09 August 2022
From the link between CEOs and profitability to how you use idioms with clients, dive into some of the key takeaways from Issue 5.2 of the Institute of Consulting’s Management Consulting Journal
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Read the full edition of the latest Management Consulting Journal, as well as all the back-issues, here.

1. Why CEO age and tenure matters to profitability

The age of a CEO and how long they’ve been with their company can have a significant impact on an SME’s profitability, says Percy Kandukira in his review of the literature on working capital management policies for managers seeking to improve profitability. As the age of managers rises, so their risk-taking ability tends to decrease and less risky projects assume greater appeal. 

The literature also suggests that the longer a CEO remains in post, the more they are likely to bargain for higher remuneration, impacting negatively on the profitability of the firm. Long-standing CEOs often wield dominating power over the company board and influence the selection of other board members in favour of those who share their outlook and interests. And long-tenured CEOs also tend to gain the trust of their managers, which means they are less likely to be monitored closely – again, this can depress the profitability of the firm.

Kandukira, P. (2022). Working Capital Management Policies for Managers to Improve Profitability. Management Consulting Journal, 5(2) 66-78.

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