CEO Succession Planning: Who’s Behind Door Number One?

Abstract:     
One of the most important decisions that a board of directors must make is the selection of the CEO of the company. And yet survey data indicates that many boards are not prepared for this process.

In recent years, shareholder groups have pressured boards to increase transparency about their succession plans. While the SEC initially allowed companies to exclude from the proxy shareholder proposals that would require more disclosure, the agency has since reversed its position.

What type of disclosure can provide shareholders with insight into succession planning?

Related teaching case ($):
Multimillionaire Matchmaker: An Inside Look at CEO Succession Planning (SSRN)

The Closer Look series is a collection of short case studies through which we explore topics, issues, and controversies in corporate governance. In each study, we take a targeted look at a specific issue that is relevant to the current debate on governance and explain why it is so important. These free instructional materials may be used in the classroom and by practitioners who want to develop a more sophisticated understanding of governance practices.

Number of Pages in PDF File: 7

Keywords: succession planning, disclosure, board of directors, corporate governance

JEL Classification: G30, G34

Accepted Paper Series