Vanishing Act in the Corner Office
With tenure at the top growing ever shorter, preparing for unexpected succession has become a board imperative.
When the board fired McDonald’s CEO Steve Easterbrook in November over his rule-breaking personal relationship with an employee, directors had a successor ready in Chris Kempczinski. It wasn’t just luck that enabled the board to elevate its president of U.S. operations to the company’s top job immediately upon the sudden end of Easterbrook’s four-year stint as CEO. After 15 years of dealing with a jarring series of unforeseen departures by leaders, the fast-food giant’s board was well-versed in handling unexpectedly short-tenured CEOs.
“McDonald’s is a poster company for emergency CEO succession,” says Paul Winum, co-head of board and CEO services at leadership development firm RHR International. “They’re so planned and thoughtful about it.”
That should be the case with every board these days. Corporate America is burning through CEOs at a record pace. Nearly 18 percent of CEOs turned over in 2018, according to PwC, the highest rate recorded in the 19 years of its annual study of the world’s largest 2,500 companies.