The Handbook of Board Governance, 3rd Edition

3Incrementalism Is Not Going to Work

Raj L. Gupta, BS, MS, MBA

Chairman of APTIV PLC (formerly Delphi Automotive PLC)

Dan Bigman, BFA

Editor-in-chief of Chief Executive and Corporate Board Member magazines

This article was originally published by Corporate Board Member. Permission has been granted by Corporate Board Member, Dan Bigman, and Raj L. Gupta to reproduce below, with thanks from Richard Leblanc.

From 2010 to 2019 was one of the most stable periods in the economy in decades. There was global growth, there was low inflation, there was an ample supply of capital, valuation of companies and multiples were expanding, so everybody was feeling good. Technology was driving some new business models and creating new opportunities, and plenty of talent was available.

In that period of time, when boards and management and CEOs were dealing with situations, it was pretty predictable. You look at your customers, you look at your market, you look at your competition, and you look at where you can grow faster than the economy and faster than peers. It required a fairly methodical, steady approach to planning and delivering without any surprises.

Having said that, during this period there were a number of things that were happening behind the scenes. To start, shareholder concentration. Between the index funds and large, actively managed funds, the whole investor base was changing. PE was also emerging as major competition to public companies. The role of activists was becoming ...