When CVS Well being abruptly introduced that high-profile CEO Karen Lynch was leaving instantly, to get replaced by firm govt David Joyner, one other announcement adopted in smaller kind: “Roger Farah Named Govt Chairman of the Board.”
It doesn’t sound thrilling, and it’s unlikely many individuals acknowledged Farah’s identify, however traders ought to concentrate. A minimum of strictly talking, Farah, 71, has grow to be essentially the most highly effective govt at this troubled firm. His position in CVS’s turnaround try will most likely be important, and if few individuals know his identify, that will likely be effective with him. When it’s steered that his profession consists largely of excessive efficiency and a low profile, he responds, “Thanks—that’s my technique.”
The proof of Farah’s newly conferred energy at CVS is indicated by a single phrase: “govt.” He had already been chairman of the board for 2 years, however the distinction between chairman and govt chairman is all of the distinction on the planet. Administrators who aren’t firm staff shouldn’t have govt duties. However “govt chair means govt administration,” says Charles Elson, a company governance skilled who has served on a number of boards. “Once you’re govt chair, the buck stops with you. You’re the true CEO.”
Farah tells Fortune that, in line with his lifelong profession technique, he received’t be like that. “I’ve a variety of experiences in my profession that I hope to deliver to bear, however solely in help of David, who’s the CEO,” he says. “There must be no misunderstanding. I’m right here to assist. If you recognize something about my observe document, that’s what I attempt to do.”
Farah has certainly constructed a protracted historical past of enhancing the efficiency of firms, principally behind the scenes. He joined Ralph Lauren in 2000—he and Ralph had adjoining places of work—when a lot of that enterprise was managed via licensing partnerships for numerous merchandise and territories. He obtained direct management of these companies, enabling the corporate to handle the model at a extra constant and upscale degree. The inventory value had been drifting downward for 3 years when he arrived, but it surely rose ten-fold in his 14 years on the firm. Right now he’s well-known within the style business, however exterior it, Ralph Lauren is known.
It was an analogous story at Tory Burch, the place he helped a brand-name designer handle and construct a extremely profitable enterprise. She’s well-known; he isn’t. Then, in 2017, he joined the Tiffany board of administrators on the behest of activist traders; he rose to chairman just a few months later. He needed to deal with LVMH’s buy of Tiffany, a tense task as a result of LVMH threatened to cancel the deal after the pandemic arrived within the midst of negotiations. The deal closed on good phrases for Tiffany.
It might appear odd that this skilled in luxurious merchandise has grow to be CVS Well being’s govt chairman. The reason is that he joined the Aetna board in 2007, and CVS purchased Aetna in 2018—and now Aetna is the issue. “Numerous the corporate is working, however a part of it’s not,” he says, “The macro points within the insurance coverage enterprise are difficult for everyone, however we’ve a few of our personal points.” So what’s the subsequent step? “We have to enhance efficiency, for certain. I feel David Joyner will lay out and articulate his plan throughout the subsequent month or two.” Nonetheless, “it’s not a fast repair,” he says. “It’s a pair years of arduous work to get us again to the place we must be.” What wants fixing? “I need to concentrate on expertise and organizational growth and tradition—that’s how I plan to spend my time.”
He emphasizes that he received’t be like different govt chairs. “It’s totally different from owner-founders or former CEOs who grow to be govt chair, and there’s a variety of confusion over the place does their position begin and cease. That’s not the case with me.”
Nobody ought to count on to listen to a lot from Farah within the media via these subsequent couple of years. But when historical past is a information, traders at the least have cause to hope that two years from now, CVS Well being can have in some way made progress towards its issues.
