No matter whether you’re an executive or an entrepreneur, succession planning has to be on your To-Do list. After all, you might be hit by a bus. Or become a celebrity CEO and get sick… like Steve Jobs.
Then you’re in real trouble.
The Los Angeles Times's opinion piece about the demands made by the Central Laborers Pension Fund at the last Apple shareholder meeting addresses this issue directly.
The Fund put forward a motion that the shareholders should be informed, in detail, of the succession plans for the corporation. Otherwise, how will they know if their investment is safe?
This same question came up, years back, regarding Disney’s then celebrity chairman and CEO, Michael Eisner. At that time, there was no known succession plan and, other than a note he wrote on the way into emergency open heart surgery, no identified successor.
Whatever was written on the note was never revealed. But, while he recovered from the surgery, his reputation never equally recovered.
It wasn’t many years later that Eisner was ousted from the company. In great part, it was because the shareholders no longer trusted him. His unwillingness to create a succession plan was a big part of the reason.
In the Apple case, the shareholders’ motion was shot down. The Fund’s investors aren’t getting their wish. Nor, in fact, should they. That would allow them to micromanage - which is nowhere near the shareholders’ responsibility.
That being said, though, shareholders do deserve some information. As the editorial states:
"Shareholders don’t run the companies they invest in; that’s what its executives do. Nor do they oversee management; that’s what the board of directors does. What shareholders should receive is enough information to judge how well the board is protecting their interests. It’s understandable why some investors would demand to know more about succession plans at Apple, given how closely associated Jobs is with the company’s success over the last decade. But the assurances Apple gave should suffice. And if they don’t, investors are free to find another groundbreaking tech company to bet on."
And there’s the question: Are your shareholders receiving enough information to judge how well the board is protecting their interests?
The situation with Apple comes with having a celebrity CEO. But the larger question is always one of governance and planning - and it applies just as much to start-ups and SMBs as it does to big brand name corporations and enterprises.
Most important, no matter where you are in your career arc, it applies to you.
Succession - its planning and execution - is serious business if you intend to ensure your personal and corporate legacy. Invest some time in it. The ROI is well worth the work.This guest blog was first published on The Thinking Executive.
Tags: shareholder activism , shareholders , succession planning