Ousting A CEO
What to do when a CEO of a large public company has stayed longer than his shelf life? Well that is what many people feel has happened at Disney with former golden boy Michael Eisner.
Machinations to have Eisner removed have been going on in a fairly public way (which to me is not good) for some time now as Disney family members and now disgruntled shareholders demand better performance from the Disney empire:
The ABC Network is a mess. And both Steve Jobs's Pixar Animation Studios and Harvey Weinstein's Miramax Studios want out of their Disney partnerships largely because of frayed relationships with Eisner. Says Sean Harrigan, president of the California Public Employees Retirement System and a longtime Eisner critic and Disney stakeholder: "It is not clear to us how a two-year lame duck CEO will benefit shareowners
Businessweek has an article about the situation that illustrates three key steps that Disney should take to remedy the situation. Interestingly the steps outlined could be a template for any large public company to use in a similar situation. They are:
FIND A SUCCESSOR, AND FAST
The board should ignore Eisner's schedule, plan an earlier departure, and begin a search for his replacement with or without Eisner's involvement. o make the best choice, the board must hire an executive search firm and cast a wide net. I like this one. Yes. Call a headhunter fast!
STRENGTHEN THE BOARD
It should add someone with the chops to be chairman, and it should turn to a true outside board member, such as Clorox Co. Chairman Robert W. Matschullat, to head the search. .
CUT EISNER'S BOARD TIES
Exiting CEOs have sometimes helped their successors make the transition to the job. But at many companies, including Coca-Cola Co. and Xerox Corp., the arrangement has been problematic, particularly when the outgoing CEO dominated the company culture, as Eisner has Disney's. The risk that Eisner will remain could hurt the search for a strong candidate. That's why directors also must set a date for Eisner to leave the board once they name a successor
Read the whole article here