Tag Archive: CEO transition

Future-Proofing: Planning C-Suite Succession

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Recently, several companies made headlines after facing dramatic leadership changes. In the current environment, it is critical that directors actively ensure their company has developed a robust executive talent management program. However, according to preliminary data from the 2012-2013 NACD Public Company Governance Survey, more than half of respondents (54.7 percent) classify their company’s CEO succession plans as informal: general discussion, but no formal documentation.

As part of NACD’s effort to share key insights and help boards plan for the future, a session of the upcoming NACD Board Leadership Conference is designed to address this very issue. During the panel discussion, three current directors will share their stories, insights and strategies for future-proofing the C-suite. Slated to speak are:

Kathy J. Higgins Victor, director, Best Buy

Last April, Best Buy experienced a significant executive upheaval when former CEO Brian Dunn resigned amid allegations of misconduct. In May, Founder Richard Schulze also stepped down. The board found themselves in a crisis situation, with two key vacancies to fill in a short period of time.

Higgins Victor, a Best Buy director since 1999, proved to be an invaluable asset to the company. With her extensive experience in executive development, succession planning, and leadership coaching, she served as the nominating committee chair during the transition. During the discussion, Higgins Victor will share the lessons she learned as well as expert insights on effective succession planning.

Michele J. Hooper, director, PPG Industries, UnitedHealth Group, NACD board

Hooper serves on the NACD board of directors and on the boards of PPG Industries, Inc. and UnitedHealth Group. She chairs the audit committee for PPG and the nominating and governance committee for UnitedHealth Group. She previously was a board member of Target Corp., AstraZeneca PLC, DaVita Corp., and Seagram Co. Ltd. She is president and CEO of The Directors’ Council, which specializes in corporate board of director recruitment.

Andrew McKenna, chairman, McDonald’s

McDonald’s faced rapid-fire changes in executive leadership in 2004. Six months after Chairman and CEO James Cantalupo’s sudden death, his successor Charles Bell resigned after being diagnosed with a terminal illness. By the time James Skinner was named CEO in December 2004, the company was well-versed in emergency executive succession.

Current McDonald’s chairman McKenna will discuss how the company worked through this challenging period, safeguarding both corporate reputation and shareholder value. He will provide insights on proactive succession planning and how boards might “future-proof” their companies.

We anticipate a candid and instructive dialogue with Higgins Victor, Hooper and McKenna. Don’t miss out on this CEO succession planning session and the many other invaluable discussions at this year’s NACD Board Leadership Conference, Oct.14-16 at the Gaylord National Resort in National Harbor, MD—just minutes from downtown D.C.

NACD Insight & Analysis for September 17, 2010

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Recently, interim CEOs have found themselves in the media spotlight.

This week, the Fortune magazine article “Should CEO be a Team Job?” notes that interim CEOs could be found at companies such as Borders, Sara Lee, and GM, while the boards searched for appropriate replacements. Though an interim CEO may be part of an “emergency” succession plan, boards must prepare to fill leadership roles when needed. Three to five years before a CEO transition is expected, the board should begin to develop long-term succession plans.

CEO Succession Planning - NACD According to the 2010 NACD Public Company Governance Survey (available Oct. 2010), most boards have taken the necessary steps to prepare for an abrupt CEO departure:

  • 70% include development of internal candidates
  • 69% include plans to replace the CEO in an emergency
  • 57% include long-term succession planning (three to five years before an expected transition)
  • 21% include engagement of an executive search firm to identify external candidates

To continually ensure that the current leadership is meeting the needs of the company, directors should engage in CEO succession planning. Well-timed transitions to new leadership enhance long-term shareholder confidence and value.