Boards often don't think about shaking up the C-suite until it's too late
Replacing a CEO is one of the most critical decisions a corporate board can make. But a closer look into executive succession planning finds that many publicly traded companies aren’t prepared to make big changes at the top — and end up paying for their lack of planning.
In a recent paper, David Larcker, a professor emeritus of accounting at Stanford Graduate School of Business; Brian Tayan, a researcher at the GSB’s Corporate Governance Research Initiative; and Edward Wattsopen in new window, PhD ’20, of the Yale School of Management, find that many companies are slow to terminate underperforming bosses, get caught flat-footed when a CEO suddenly departs, and often fail to appoint a viable or permanent successor.
This piece originally appeared in Stanford Business Insights from Stanford Graduate School of Business. To receive business ideas and insights from Stanford GSB click here: (To sign up: https://www.gsb.stanford.edu/insights/about/emails)