A Matter of Succession

Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com

The Right Next CEO

Nothing that a board of directors does is more important than making sure that their company has the right CEO – well, excepting that it makes sure that the next CEO is being trained to take over the reigns at the appropriate time. Seeing to the personal growth, leadership development and accumulated experience of the heir apparent is a mission-critical function for the board of directors.

Issues of succession can bring the board into direct conflict with the present CEO. But these conflicts should not be avoided. I’ve never met a CEO who didn’t secretly want to live forever – to exercise leadership – guide a company in its growth. CEOs don’t live forever and many of them have a rather limited shelf-life. Their leadership styles might be appropriate for a particular stage of a company’s growth but, as soon as the company advances to the next stage, the CEO’s abilities become increasingly unsuited to the task. I have known very good CEOs who were great start-up founders but not very good at managing a middle market company. Their continued service resulted in stunting the company’s growth – limiting its possibilities.

So, it is up to the Board to make sure that the company had the right CEO – and has made adequate arrangements for having the right next CEO. Success in this area will be important to the board’s meeting its principal responsibilities to protect and extend shareholder value.

© Dr. Earl R. Smith II

Related Articles:

• Risk Governance – Managing Safe Companies

• Nomination Committee Strategies

• Inspirational Governance

• New Board Member Selection

• Practical Governance Practices

• Some Notes on Board Compensation Norms

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