Succession Planning: Is the Heir Apparent?

Succession plans can help provide continuity of leadership following planned or unplanned executive departures, but they are a surprisingly scarce management tool. Succession plans are most prevalent in the UK (39% of researched firms), and least prevalent in Taiwan and Japan (<2% of researched firms). The situation at Disney, where the heir apparent to long-time CEO Robert Iger suddenly announced his departure in April, shows that succession planning is a complex process where companies must balance communicating a leadership vision to shareholders with retaining and motivating existing executives. From our US coverage universe of 900 stocks, a total of 251 companies, including Exxon Mobil, Verizon and Coca-Cola, perform poorly on a screen of succession planning, executive pay and corporate governance performance.

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