CEO Succession Planning: Who’s Behind Door Number One?
7 Pages Posted: 18 Sep 2010 Last revised: 3 Sep 2013
Date Written: June 24, 2010
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), available at: http://ssrn.com/abstract=1593231.
Topics, Issues and Controversies in Corporate Governance and Leadership: 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. Larcker and Tayan are co-authors of the book Corporate Governance Matters, and A Real Look at Real World Corporate Governance.
Keywords: succession planning, disclosure, board of directors, corporate governance
JEL Classification: G30, G34
Suggested Citation: Suggested Citation