Stay on top of corporate org charts
Steve Jobs and Walt Mossberg
The brouhaha over the resignation of Kenneth Lewis as Bank of America’s chief executive brings up a fresh angle for covering the companies on your beats: Succession planning.
Even in the absence of BofA-level drama, asking company executives about future staffing strategy is a legitimate line of questioning as you pursue your watchdog function on behalf of employees, retirees, investors, suppliers and other stakeholders.
Do an in-depth look at one firm’s organization chart, or a succession-planning package featuring your area’s most prominent companies and the various dilemmas they’ll face over the next five years. Is the CEO aging out of the job soon? Has the treasurer been wooed away by a rival? Will a pending merger shuffle the pecking order? This could be a fun multimedia package, including an interactive graphic with timelines, bios, what-if scenarios and other elements.
To be sure, publicly traded companies are somewhat constrained from informal chit-chats about possible successors because such speculation on leadership changes could inadvertently move the market in the company’s shares. But raising the topic in executive interviews may reap an unexpected response or news you otherwise wouldn’t hear.
Also, keep in mind there are more circumstances besides performance and age that can prompt a senior executive to move on or need a hiatus. Here’s a January article from Business Week about Apple CEO Steve Jobs; discussing the grey areas of disclosure rules as they pertain to executive illness.
Note that the article refers to the Millstein Center for Corporate Governance and Performance at Yale University; the center and others like it can be conduits to analysts and third-party experts.
Another source of corporate governance expertise: The National Association of Corporate Directors, Its Web site is a decent primer on current issues in facing company boards and others concerned with corporate management. You should routinely be approaching the specific board members of companies you cover, as well.
Other potential sources include recruiting firms, human resources consultants and corporate compensation experts.
If there is a significant organized labor presence at the company, sometimes top union leaders are aware of succession plans and may be willing to share information or tips. It’s worth a try.
Don’t overlook the subject when covering private companies and small businesses.
Restaurants, retail chains and other local landmarks that currently flourish as family businesses may not survive – or may substantially change character — as the older generation retires.
I can think of several examples in my neck of the woods where household-name establishments simply shut down because none of the heirs wanted to continue running them. In another instance, a nearby upscale grocer is trumpeting the fact that his son has joined the executive ranks, assuring customers and suppliers that the family touch is good for another generation or two.
