The concept of nepotism has been with us since the mid-17th Century, when Italian Catholic popes began giving their nephews, or nipote, high-ranking church positions strictly because of familial ties. Even now, it’s a practice humans can’t seem to shake.
Perhaps most importantly, nepo CEOs need to keep their egos in check, while discarding any sense of entitlement. “Leaders need to be humble and they need to hear feedback that is awfully uncomfortable to hear,” says Moshe Cohen, a senior lecturer of management at Boston University’s Questrom School of Business. “If you’re coming in as the anointed successor, you might not be that open to feedback, and other people might not feel comfortable giving it to you because, well, you’re the kid of the founder.” (Or, in Ellison’s case, the kid of the money.)
At publicly traded companies, boards and nepo CEOs need to navigate an unusual division of power, Stevenson says. Unless the CEO’s family has a majority of voting shares in a company, he or she must cooperate with and even inspire independent directors, who have the power to replace the leader.
The best nepo CEOs arrive poised to succeed because they’ve been an informal student of business their entire lives. “If you’ve been hanging on the elbow of a parent who was a CEO or founder, you’ve learned some things that people who aren’t in the thick of it don’t see,” says Cohen. Depending on their relationship with their parents, a nepo CEO may have absorbed nuanced lessons about negotiations, relationships, or articulating a company’s vision, he adds. “Those are things that people work really hard to learn.”
