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WeWork CEO Adam Neumann. Photo: Cindy Ord/Getty Images for WeWork

For 25 years Silicon Valley has built successful companies by handing control to inventive and driven but sometimes eccentric or reckless startup founders. From Facebook to Google, these leaders often receive special kinds of voting stock that let them sell shares to the public — and become fabulously wealthy — while retaining power over their firms.

Why it matters: As the latest wave of tech startups lines up for its string of IPOs, the pendulum may be swinging the other way — with investors demanding problematic founders step back or cede control.

  • As WeWork's public offering falters amid questions about the company's business model and the behavior of founder and CEO Adam Neumann, Softbank, WeWork's biggest investor, is pushing to replace Neumann, the Wall Street Journal reports.
  • Several stories have targeted detailing Neumann's excesses, from his penchant for alcohol to an epic pot-filled private plane flight to examples of WeWork doing business with other entities he controlled.

Where it stands: For now, Neumann still has his voting stock, but WeWork needs access to cash to keep funding and expanding its growing network of office-sharing spaces.

  • Neumann's troubles come in the wake of founder Travis Kalanick's 2017 ouster from Uber, which he had built and controlled. His board turned on him after accounts surfaced of a culture of sexual harassment, gender discrimination, retaliation and bullying that he'd overseen. 

The big picture: There have been other cautionary tales of placing too much faith in a charismatic founder (see: Theranos). In other cases, eccentric founders remain in control, such as Elon Musk, though concerns remain about his judgment, temperament and ability to adhere to securities law.

Our thought bubble: Entrepreneurial drive doesn't necessarily translate into true leadership, particularly as organizations grow.

  • When control passes from founders, right now it usually goes to professional managers beholden to short-term market forces, and that isn't necessarily a great answer, either.
  • The industry needs to develop a better system for cultivating founders who have ethical values as well as disruptive ideas.

The bottom line: Being an effective CEO requires a range of skills and few individuals have all of them. But when founders are guaranteed to remain in control, they're empowered to be reckless, licensed to misbehave, and difficult to hold accountable.

Go deeper: Why WeWork waits

Editor's note: This story has been corrected to clarify that the Wall Street Journal's coverage reported on only one pot-filled private plane flight by Neumann (not multiple pot-filled plane flights).

Go deeper

UN report: Pandemic set to cost global tourism $2 trillion in 2021

A tourist in front of the Eiffel Tower on November 25, 2021 in Paris. Photo:Chesnot/Getty Images

A new United Nations report warns that global tourism will see only modest revenue gains in 2021 after last year's historic losses amid the COVID-19 pandemic.

Why it matters: Tourism revenues in 2020 fell by more than half from the previous year — a significant blow to the global economy, according to analysis by the UN World Tourism Organization (UNWTO).

Updated 2 hours ago - Health

2 federal judges temporarily block Biden vaccine mandates

President Biden delivers remarks on the Omicron COVID-19 variant at the White House on Nov. 29. Photo: Anna Moneymaker via Getty Images

The Biden administration was temporarily blocked from enforcing COVID-19 vaccine mandates for millions of workers by federal judges in two states on Tuesday.

The big picture: The orders, by federal judges in Kentucky and Louisiana, come one day after a federal judge in Missouri halted the mandate, which has a Jan. 4 deadline, in 10 states.

2 hours ago - World

Honduras elects first female president

Honduran President-elect Xiomara Castro, of the Libertad y Refundacion (Libre) Party, in Tegucigalpa, Honduras, on Sunday. Photo: Inti Ocon/Getty Images

Former Honduras first lady Xiomara Castro is set to become the country's first female president president, after the ruling party conceded defeat in the country's elections on Tuesday night, per AP.

Why it matters: The democratic socialist and her Libre Party have broken a 12-year run for the conservative National Party, which U.S. prosecutors alleged fostered a "narco-state," note Axios' Latinos' Marina E. Franco and Russell Contreras.