After months of back-and-forth deliberation and suspense, Hon Hai Precision Industry Co founder Terry Gou (郭台銘) finally threw his hat into the ring of Taiwan’s presidential election next year. The immediate reactions from the blue, white and green political camps all fell within everyone’s expectations, and the response from the public who are fans of Gou was generally underwhelming and lacking in the kind of poll rating surge that typically accompanies such announcements.
Terry Gou’s political capital originates from three main sources. Firstly, after giving financial assistance to the central party office and local factions of the Chinese Nationalist Party (KMT) for several decades, Gou has garnered substantial favors and support.
Secondly, during the COVID-19 pandemic, Gou successfully bypassed the government to acquire Pfizer-BioNTech vaccines, thereby greatly cutting down the potential number of associated casualties. Many Taiwanese feel genuinely indebted to this effort.
Thirdly, many economy-minded voters harbor an unrealistic expectation of Gou’s business savvy, international connections and managerial skills as a world-class entrepreneur. Most of his fans fall into the third category.
Do outstanding corporate CEOs always make excellent government leaders? Based on an analysis of past US presidents, the answer is actually “no.”
From the beginning of the 20th century, the majority of US presidents were either lawyers or professional politicians. Only four presidents had business experience before assuming office.
Before former US president Herbert Hoover entered politics, he was engaged in a prosperous business of developing and operating mines around the world. His presidency was tainted by the mishandling of the 1929 Great Depression, eventually ending with him only serving one term in office.
Former US president Harry Truman managed to accomplish several earth-shattering feats, including dropping atomic bombs on Japan to end World War II, implementing the Marshall Plan to rebuild Europe, winning the Korean War and establishing the Cold War world order. Before entering politics, he started and ran a men’s clothing store, which later went bankrupt due to poor management, and he was thus a less-than-mediocre businessman.
Former US president George W. Bush only started his political career after successfully running businesses for more than a decade. However, his presidency was tarnished by the invasion of Afghanistan, the scandalous initiation of the Iraq War and the tragic aftermath of Hurricane Katrina, making Bush the president in US history with the lowest approval rating prior to leaving office.
Lastly, before being elected as the US president, Donald Trump was known as a billionaire, but had zero political experience. He mishandled the US’ COVID-19 outbreak and caused a large number of unnecessary casualties; his behaviors and policies aggravated the polarization and division in the country, led to direct confrontation between China and the US, and almost destroyed the US’ 250-year-old democratic tradition.
There are two key reasons why corporate leaders do not always make competent government leaders.
First, the end goals of the two jobs are not the same. The goal of a business executive is relatively straightforward: to maximize the company’s profits and shareholders’ value. A government leader must take into account the interests of all stakeholders, and then carefully weigh these considerations against one another to reach a final decision that everyone or at least the majority of people could accept.
Because of the wide variety of factors that go into consideration and different issues involving different sets of stakeholders, how one properly juggles the interests of all parties in complex decisionmaking requires sophisticated trade-off skills, empathetic political sensitivity and excellent communication capabilities.
The second reason is that it takes a lot of practice to become a decent political leader. They need to undergo considerable training and trial-and-error in order to perform at a certain level. Although the management, leadership and communication skills of business executives and political leaders might have a lot in common, the natures of their target audiences are quite different. As a result, the most important capability that a political leader must master and acquire is the skill to persuade.
Because members of the same corporation are more likely to share similar ideas, interests and values, a corporate leader could get by with a top-down communication style. However, a government’s target audience consists of people with a wide array of educational backgrounds, moral/religious values and financial interests.
In addition, the democratic norm dictates that a government leader can only communicate as a peer or even as a humble public servant. Therefore, even if only a small minority of people remain unpersuaded, one can only resort to patience; taking a hard charging route such as “take it or leave it” is rarely an option.
The often-praised virtues of corporate leaders, such as penny-counting efficiency-driven business savvy and unilateral decisiveness, might not necessarily be the most desirable traits of political leaders.
In addition, Gou has two personal weaknesses that render him incompatible with the presidency. The moral character of a political leader, with integrity being the most important element, has a huge impact on their overall appeal and credibility. In the integrity department, Terry Gou’s track record gives him a very poor score, putting him almost at the same level as Trump.
When Gou was in charge, Hon Hai made investment commitments around the world that repeatedly bounced, and which eventually turned into cautionary tales and jokes within the investment community.
Hon Hai’s promised investment to build a gigantic display panel factory in Wisconsin, which Trump called the eighth wonder of the world, was a prime example of such promises.
In the political arena, Gou first turned his back on his promises in the 2020 presidential election, hanging the Chinese Nationalist Party (KMT) presidential candidate, former Kaohsiung mayor Han Kuo-yu (韓國瑜) and the KMT out to dry; he is now reneging again on next year’s presidential election, effectively breaking the “non-green alliance,” potentially handing the Democratic Progressive Party an easy victory.
It is next to impossible for a political leader with such a Machiavellian and exploitative trait to fully unite people in Taiwan to rise to the challenges.
Finally, Hon Hai has huge investments and a large footprint in China. If he is elected president, Taiwanese have every reason to suspect that he might factor Hon Hai’s interests in China into his policy choices and executive decisions. The US, Japan and the EU might also justifiably take a suspicious eye in scrutinizing Gou’s every move, conjecturing that China may use Hon Hai as a pawn and twist Gou’s arms into harming the interests of Taiwan or its allies.
Internationally, taking such conflicts of interest into consideration is common practice when filling high-level government positions. When it comes to a nation’s president, “not even the slightest hint of suspicion” seems to be an appropriate criterion for this assessment. When questioned about how he would respond were China to blackmail him through Hon Hai, Gou saying that he is “willing to sacrifice all of his personal assets” seems to be a cavalier brush-off that grossly underestimates the gravity of the underlying concerns.
Chiueh Tzi-cker is a joint appointment professor in the Institute of Information Security at National Tsing Hua University.
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