Dr. Fiona Hill

Is the (dis)United States a meritocracy? Reasonable people can disagree, but put Fiona Hill down as a definitive “yes”.

“Years later, I can say with confidence that this country has offered for me opportunities I never would have had in England. I grew up poor with a very distinctive working-class accent. In England in the 1980s and 1990s, this would have impeded my professional advancement. This background has never set me back in America.”

The Age of Self Promotion

When a person’s image and/or reputation is inflated, sometimes people lament, “Big hat, no cattle.” A lot of people today, like the President of the United States, excel at promoting themselves more than anything else. Thanks to the public’s allegiance to valueless media, we’re making a mockery of merit.

A case study. My July morning routine entails working out, eating breakfast, making a green tea latte, and then settling in to the day’s Tour de France stage which I spend about thirty minutes fast forwarding through.

This year there are three cyclists from the U.S. in le Tour, meaning about 1.5% of the total peloton. One of the U.S. riders is barely surviving the mountain climbs, just making the maximum time cuts. But because we’re living in the Age of Self Promotion, that same rider is starring on the U.S. television coverage, dropping daily broh-heavy “behind the scenes” video segments that add nothing to the event. He seems likable enough because of a goofy personality. And maybe the fact that both of his parents were professional cyclists and he’s bounced back from a horrific accident a few years ago contribute to some of his faux-fame as well.

But even accounting for those extenuating circumstances, the fact that he’s in damn near last place would only matter if we were in an Age of Meritocracy, but we’re not. Increasingly, we’re surrounded by people with really, really big hats. Which makes it tough to see the front of the race.

Chelsea Clinton and the Meritocracy Myth

Yes, I'd be happy to join your board.

After reading a few accounts of Chelsea Clinton’s recent appointment to the Board of InterActiveCorp (IAC), a company that runs sites including Match.com, Ask.com, and Dictionary.com, here’s what I think we’re supposed to conclude.

There’s one winner and one loser.

The obvious winner? C-squared herself. The Wall Street Journal explains. Ms. Clinton will receive an annual retainer of $50,000. In addition, she will receive a $250,000 grant of IAC restricted stock.  

IAC’s stock is up 41% this year. Say she serves for ten years. With stock appreciation that will be well over $1m in income for attending what I suspect are quarterly meetings. Winner, winner, several very nice chicken dinners. She’s currently working on a Ph.D at Oxford. Sure hope they reimburse her for her airfare.

The loser is actually losers. From Alyce Lomax in Daily Finance:

This new appointment is a big — and possibly bad — deal for IAC shareholders.

Boards of directors are charged with protecting shareholder interests, whether many investors realize it or not. These days, plenty of corporate problems — such as out-of-control CEO pay — can be correlated with dysfunctional or flimsy boards that have nothing near an independent spirit that’s willing to challenge management teams.

Now 31, Chelsea Clinton was in her teens during the dot-com bubble and only about 20 years old when it burst, for example. That was a make-or-break time for companies like IAC, but she was probably still pretty preoccupied simply with the process of growing up.

GMI’s Nell Minow commented on Clinton’s appointment on PBS’sNightly Business Report, arguing that the best directors have decades of achievement to speak for them. She also pointed out that IAC’s Diller has a tendency to populate his board with “cronies,” which is just one reason The Corporate Library gives that company a near-failing “D” grade for its corporate governance.

In addition, Diller supported both of Clinton’s parents’ campaigns, which gives shareholders no reason to believe this is the kind of independent director that helps make a robust boardroom. In fact, she sounds a bit dependent on her parents’ careers at this point.

Name-dropping “important” or “known” appointees instead of adding truly experienced directors indicates weak corporate governance and madly waving red flags for shareholders. 

The unreported loser is the notion of meritocracy that the right loves to trumpet. This is the idea that the relative work ethic of U.S. citizens determines their success instead of the color of their skin, their gender, or their parents’ connections. Ironic that a first family of the left disproves one of the right’s foundational ideas.

C-squared’s appointment proves the playing field, that is life in the U.S. in 2011, isn’t level, the starting line of life is staggered, and an individual’s personal capital sometimes trumps others’ smarts and work ethic.