35% of companies, including Apple, have a CEO succession plan
While investors attempt to strongarm Apple's board of directors into publicizing their CEO succession plan, a recent survey found that just 35 percent of companies have drafted such a plan.
A December survey of 1,318 executives by Korn/Ferry International, as noted by the San Francisco Chronicle, found that 98 percent believe a CEO succession plan is an important part of corporate governance. But the poll found only 35 percent of companies have planned for the departure of their CEO.
"Given the number of abrupt, high profile executive departures this year, it's surprising that more companies are not acting with greater urgency to put a CEO succession plan in place," said Joe Griesedieck, vice chairman and managing director of Korn/Ferry Board & CEO Services Practice.
"In today's environment, succession planning should be a part of any company's standard approach to governance."
In January, it was revealed that a group of shareholders is attempting to force Apple to disclose a written CEO succession policy. The proposal came to light in the company's 2011 Proxy Statement filed with the U.S. Securities and Exchange Commission.
Apple opposes the proposal, but has noted that the company maintains a confidential "comprehensive succession plan." The board of directors of the Cupertino, Calif., company views the publishing of the plan as a move that would give Apple's competitors an "unfair advantage."
Talk of Apple's succession plan picked up once again in January, when Apple announced that its chief executive, Steve Jobs, would take another medical leave of absence from the company. Jobs said in a statement that he will remain CEO and be involved in all major strategic decisions, but said he must leave his day-to-day role to focus on his health.
Overseeing the company's daily operations is Chief Operating Officer Tim Cook, who previously took over for Jobs in another medical leave of absence in 2009. Jobs eventually returned to work in June of 2009 after he received a liver transplant.
The investor proposal to disclose Apple's CEO succession plan will be in the hands of shareholders at the company's annual meeting on Feb. 23. Though Apple has recommended that shareholders vote against it, the plan did recently receive support from influential advisory firm Institutional Shareholder Services.
A December survey of 1,318 executives by Korn/Ferry International, as noted by the San Francisco Chronicle, found that 98 percent believe a CEO succession plan is an important part of corporate governance. But the poll found only 35 percent of companies have planned for the departure of their CEO.
"Given the number of abrupt, high profile executive departures this year, it's surprising that more companies are not acting with greater urgency to put a CEO succession plan in place," said Joe Griesedieck, vice chairman and managing director of Korn/Ferry Board & CEO Services Practice.
"In today's environment, succession planning should be a part of any company's standard approach to governance."
In January, it was revealed that a group of shareholders is attempting to force Apple to disclose a written CEO succession policy. The proposal came to light in the company's 2011 Proxy Statement filed with the U.S. Securities and Exchange Commission.
Apple opposes the proposal, but has noted that the company maintains a confidential "comprehensive succession plan." The board of directors of the Cupertino, Calif., company views the publishing of the plan as a move that would give Apple's competitors an "unfair advantage."
Talk of Apple's succession plan picked up once again in January, when Apple announced that its chief executive, Steve Jobs, would take another medical leave of absence from the company. Jobs said in a statement that he will remain CEO and be involved in all major strategic decisions, but said he must leave his day-to-day role to focus on his health.
Overseeing the company's daily operations is Chief Operating Officer Tim Cook, who previously took over for Jobs in another medical leave of absence in 2009. Jobs eventually returned to work in June of 2009 after he received a liver transplant.
The investor proposal to disclose Apple's CEO succession plan will be in the hands of shareholders at the company's annual meeting on Feb. 23. Though Apple has recommended that shareholders vote against it, the plan did recently receive support from influential advisory firm Institutional Shareholder Services.
Comments
I will vote against this proposal.
This solves absolutely nothing, of course, but apparently it makes them feel better.
Are these shareholder petitioners just stupid or what?
I vote 'yes'.
I own a few Apple shares and I don't believe that the succession plan should be made public. That's like publicizing the battle plan before going into battle. I will be voting against the proposal.
I don't understand that. I am sitting on a real battlefied right now. If don't want to give the enemy the upper hand, so I do everything in my power not to let on my battle plans. I want to win and him to lose.
By your logic, the shareholders are the enemy of the corporation. That is absolutely wrong; the shareholders are the owners of the corporation.
So, 66% of companies do not have a CEO succession plan. I would say that the CEO is really not that important in at least 66% of companies. Apple is one of the few exceptions where people even know the name of the CEO.
Truth of the matter is that most businesses that don't "run themselves" can't survive the loss of their CEO or managing partner. 66% Are more likely focused on just surviving.
Heck, even Apple had to hire an interim CEO for 5-6 years while they tried to get just the right person...
Agree that companies should have a plan, but should not be forced to publicize it.
So, 66% of companies do not have a CEO succession plan. I would say that the CEO is really not that important in at least 66% of companies. Apple is one of the few exceptions where people even know the name of the CEO.
I think it's more that CEOs make long term strategic decisions as opposed to day to day details, therefore it's ok to take a while to find a new one. You don't really need an immediate succession plan.
IMHO these calls are just the latest iteration of picking on Apple.
I don't understand that. I am sitting on a real battlefied right now. If don't want to give the enemy the upper hand, so I do everything in my power not to let on my battle plans. I want to win and him to lose.
By your logic, the shareholders are the enemy of the corporation. That is absolutely wrong; the shareholders are the owners of the corporation.
The board of directors are the agents of the shareholders. The board of directors needs to insist on and approve of a succession plan. Fortunately for us, the shareholders, they have done both of those things. They also need to keep this under wraps.
To use your analogy, the American people aren't the enemy so why doesn't the Pentagon let us in on their warfighting plans? We can keep a secret, right?
I don't understand that. I am sitting on a real battlefied right now. If don't want to give the enemy the upper hand, so I do everything in my power not to let on my battle plans. I want to win and him to lose.
By your logic, the shareholders are the enemy of the corporation. That is absolutely wrong; the shareholders are the owners of the corporation.
Perhaps you are familiar with the phrase, "Loose lips sink ships." The generals and admirals don't tell every soldier and sailor all the details of their battle plans, only what they need to know to perform their duty. Shareholders not only have loose lips (and have no 'duty' in this sense), but you can pretty much assume that some of them are "the enemy", so informing shareholders of your succession plan is pretty much analogous to posting your war plans on the Internet.
I don't understand that. I am sitting on a real battlefied right now. If don't want to give the enemy the upper hand, so I do everything in my power not to let on my battle plans. I want to win and him to lose.
By your logic, the shareholders are the enemy of the corporation. That is absolutely wrong; the shareholders are the owners of the corporation.
Wrong reading. Shareholders are not the enemy - but they also do not uniformly have the best interests of the corporation at heart either from individual to individual and from pension fund to pension fund. And again shareholder are NOT the owners of the corporation - they hold interest in it - a very important distinction that the courts have used several times. That being said , if the actual plan was revealed to shareholders, it becomes a public document, and revelatory to competitors. The Apple BOD has stated previously that they HAVE a succession plan in place. They just choose not to reveal the contents to the shareholders. Shareholders are known as a body to be largely indiscrete and self-interested - especially funds managers, so I agree that the BOD should resist all demands to make that document public - it is enough to know they have a succession plan in place.
The board of directors are the agents of the shareholders. The board of directors needs to insist on and approve of a succession plan. Fortunately for us, the shareholders, they have done both of those things. They also need to keep this under wraps.
To use your analogy, the American people aren't the enemy so why doesn't the Pentagon let us in on their warfighting plans? We can keep a secret, right?
On the other hand Julian is waiting to take care of any "leaks" that happen to come his way from disgruntled PFC's, stockholders or whomever...
http://www.informationweek.com/news/...leID=229201237
Note, first of all, that the shareholder proposal would not "force Apple to disclose a written CEO succession policy."
to tundraboy: You know something all others don't? Apple has _not_ revealed its succession plan. The only thing we've publicly seen is that Tim Cook takes over if Steve Jobs takes a leave of absence. That can be taken as a sign, maybe, but certainly not any "explicitly revealed succession plan". That said: I don't want them to reveal such a plan. I only want them to _have_ one.
I disagree. Its clear that Cook is tagged as CEO. Day to day running of the company and all things production related.
The question is whether or not that role would continue to include responsibilities for 'visionary' (for lack of a better word.)
No where does the CEO role mandate responsibility for product direction, and I don't think Cook will have (or want) that role.
Detailing individual responsibilities beyond day-to-day show running is not something Apple should be forced to disclose. Exposing who would be making design decisions would be akin to disclosing the design itself.