Knowledge Center: Publication

Board Effectiveness

Overcoming the Challenge of ‘Mismanaged Agreement’ Among Directors

10/15/2014 John T. Thompson
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Imagine that the board of a successful company, facing no apparent crisis, approaches the date of a long-planned CEO succession and finds, to its surprise, that no internal candidate is fully ready to assume the top job. A board member steps in as interim CEO while an external search is conducted for a successor or the most promising internal candidate gets up to speed.

Not surprisingly, investors don’t like this scenario and punish the stock accordingly. What is surprising is that not a single director desired this outcome, and yet here they are.

How is it possible that well-intentioned and certainly intelligent directors could somehow collectively fail at CEO succession planning when each one of them would attest in private to its importance?

John T. Thompson Vice Chairman +1 650 2341520

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