Why a big Swiss company has eliminated the CEO position

The heads of Richemont’s individual brands will report directly to the board of directors instead

Luxury Swiss watchmaker Richemont has announced that when its CEO, Richard Lepeu, retires next year he won’t be replaced.

The company that owns jewelry, watches, and clothing brands like Cartier, Chloé, and Montblanc is discarding the post of CEO entirely. The change seems to have prompted a sharp spike in the company’s shares.



After the change comes into effect, the heads of Richemont’s individual brands—internally called “maisons”—will report directly to the board of directors instead of a group-level CEO.

The company aims to streamline decision-making and allow the maisons to respond to “dynamic” markets more quickly, specifically “the developing field of digital marketing and e-commerce,” the group said in a statement.

Speaking about not having a CEO, chairman Johann Rupert said, “One individual cannot be held responsible, it’s unfair.”  Richemont runs nearly 20 separate maisons, and the group generated revenue of around $12 billion in its latest fiscal year. However, multinationals give their CEOs great power giant paychecks to steer company strategy.



Recently, Swiss watchmakers have grappled with a combination of collapsing demand in Hong Kong, their biggest market, tourists avoiding Europe for fear of militant attacks, and high costs exacerbated by a strong Swiss franc.

This article originally appeared on Quartz.