Ensuring CEO Succession: Agility in the Boardroom

ON APRIL 19, 2004, JAMES CANTALUPO, THE CEO OF MCDONALD’S, DIED OF A HEART ATTACK. The next day the board of the McDonald’s Corporation announced that Charlie Bell would succeed Cantalupo. Although the board and employees of McDonald’s grieved for James and his family, the company didn’t miss a heartbeat.

On October 2, 2009, in the midst of a financial crisis, Ken Lewis, CEO of Bank ofAmerica, announced his resignation. The board had ample warning, since Ken was under pressure to move on for months. But the board had no successor. Instead, they searched frantically. Some executives whom the Bank of America board asked to be their CEO refused the position practically on the front page of the Wall Street Journal. Excellent candidates that were brought forward were unsure of the board’s process. The question of who would lead Bank of America riveted the business and financial community. In the meantime, the company was leaderless for months during the financial storm, and its stock price fell. The board with warning was caught off guard; the board without warning replaced its CEO overnight. What accounts for the difference? Board preparedness, or what we call “succession agility in the boardroom.”

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