Page 451 - Ray Dalio - Principles

g. Make sure that the people doing the assessing 1) have the time to be fully

informed about how the person they are checking on is doing, 2) have the
ability to make the assessments, and 3) are not in a conflict of interest that
stands in the way of carrying out oversight effectively. In order to assess
well, one has to gain a threshold level of understanding and
that takes time. Some people have the ability and the courage
to hold people accountable, while most don’t; having such
ability and courage is essential. And the person doing the
assessing must not have conflicts of interest—such as being in
a subordinate position to the person they are intended to check

on—that stand in the way of holding them accountable,
including recommending that they be fired.

h. Recognize that decision makers must have access to the information
necessary to make decisions and must be trustworthy enough to handle that
information safely. That doesn’t mean that all people must have
access and be trustworthy. It is possible to have subcommittees
who have access to sensitive information and make

recommendations to the board that are substantiated with
enough information to make good judgments, but without
disclosing the highly sensitive particulars.

16.2 Remember that in an idea

meritocracy a single CEO is not
as good as a great group of

leaders.

Dependence on one person produces too much key-man risk,

limits the range of expertise (because nobody is good at
everything), and fails to establish adequate checks and
balances. It also creates a burden because there’s generally too
much to do. That’s why we have a co-CEO model at
Bridgewater that is essentially a partnership of two or three
people who lead the firm.

At Bridgewater the CEOs are overseen by a board largely

via the executive chairman or chairmen. In our idea
meritocracy, the CEOs are also held accountable by the
employees of the company, even though these employees are