After firing Karen Lynch, CVS has a new power player — but he's not CEO

That doesn't sound exciting and it's unlikely that many people know Farah's name, but investors should pay attention. Strictly speaking, at least, Farah, 71, has become the most powerful executive at this troubled company. His role in CVS's turnaround attempt will likely be significant, and if few people know his name, that's fine with him. When it is suggested to him that his career has largely consisted of high performance and restraint, he replies: “Thanks – that's my strategy.”

The evidence of Farah's newly delegated power at CVS is indicated by a single word: “leadership.” He had already been CEO for two years, but the difference between CEO and CEO is the biggest difference in the world. Directors who are not employees of the company have no managerial responsibility. But “chairman means executive management,” says Charles Elson, a corporate governance expert who has served on several boards. “When you are in the executive chair, the responsibility is yours. You are the real CEO.”

Farah tells Assets that in keeping with his lifelong career strategy he will not be like that. “I've had a lot of experiences in my career that I want to bring to the table, but only to support David, the CEO,” he says. “There should be no misunderstanding. I'm here to help. If you know anything about my track record, that’s what I’m trying to do.”

Indeed, Farah has built a long history of improving companies' performance, mostly behind the scenes. He joined Ralph Lauren in 2000 – he and Ralph had adjacent offices – when much of that business was managed through licensing partnerships across different products and territories. He was given direct control of these businesses, allowing the company to manage the brand at a more consistent and premium level. When he arrived, the stock had already been in decline for three years, but it increased tenfold in the 14 years he was with the company. Today he is famous in the fashion industry, but Ralph Lauren is also famous outside of it.

It was a similar story with Tory Burch, where he helped a brand designer run and build a highly successful company. She is famous; that's not him. Then, in 2017, he joined Tiffany's board at the behest of activist investors; he rose to chairman a few months later. He had to handle LVMH's purchase of Tiffany, a tense task since midway through negotiations, LVMH threatened to cancel the deal after the pandemic hit. The deal was concluded on good terms for Tiffany.

It may seem strange that this luxury products expert has become CEO of CVS Health. The explanation is that he joined the Aetna board in 2007 and CVS bought Aetna in 2018 – and now Aetna is the problem. “A lot of the business works, but a lot of it doesn’t,” he says. “The macroeconomic issues in the insurance business are challenging for everyone, but we have some of our own issues.” So what's the next step? “We definitely have to improve our performance. I think David Joyner will lay out and formulate his plan in the next month or two.” Still, “It's not a quick fix,” he says. “It's a few years of hard work to get us back to where we should be.” What needs to be fixed? “I want to focus on talent, organizational development and culture – that’s how I want to spend my time.”

He emphasizes that it will not be like other executive chairs. “It's different than founder owners or former CEOs becoming board chairs, and there's a lot of confusion about where their role starts and ends. That’s not the case for me.”

No one should expect to hear much from Farah in the media in the next few years. But if history is any guide, investors at least have reason to hope that CVS Health has somehow made progress in overcoming its problems in two years.