How Corporate Boards Plan for CEO Succession

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

July 28 (Bloomberg) –- Russell Reynolds Associates CEO Clarke Murphy discusses how companies recruit future CEO candidates and evaluate leadership potential. He speaks on ‘Market Makers.” (Source: Bloomberg)

He is the ceo of j.p. morgan.

When you get news like that, what does that mean?

Most of the boards have succession plans in place already.

You go to work as a ceo and you start succession planning.

The board is holding you to it.

The sec cares more than they used to.

You don't have a lot of choice.

That is ideal.

Does that actually happen?

In the best companies it does.

When you look at ford, they were well prepared.

I think the best run companies are ready.

Does this mean you are busy are working with ward's -- boards?

It changed our business dramatically.

From 2010 onward, boards are asked us to come in three or four years in advance.

They want to know if someone can be a ceo in the future.

It is almost like a college president.

Is it tougher to find people who really want to but up to scrutiny?

No.

it is tougher to find those who have adapted to a world of changes faster than it used to.

The agility needed, now a business plan -- the competencies to get there are much more important.

Is important for culprit -- or print culture to bring in a ceo before they take the seat?

If i worked at apple or ibm and somebody gets jetted in from the outside, it must be horrible for corporate culture.

Companies do want to promote from within.

We do a lot of research as you would imagine.

Of the fortune 250, most joined in the five years prior.

They were brought in trained to be this.

85% of corporate ceos are promoted inside.

Most of them, have been there for over 15 years.

When the boards see a gap, they say we will go outside three or four years in advance.

Tesco had to go outside for dave lewis.

They were not prepared.

The world is changing fast in the process.

What drives you nuts about ceo zeit diced -- zeitgeist?

You are in the trenches of this.

What drives you nuts about how people think about the ceos and how the system behaves?

I take a more positive approach,. a lot of boards did not know how fast the world would change.

Whether it is digital or global sourcing.

The preparation you need to succeed in the job has never been so complex before.

How does one prepare?

You have to work in multiple functions and parts of the world.

You have probably moved once.

Is leadership and overused word?

Has it changed in the last five were -- years?

You need to have a good strategic vision.

You'd need far better communication skills to deal with a show like this successfully.

You also have to have more agility.

You have to say what i am wrong and we will change.

Respond to alan mulally.

He had to deal with the train wreck of all the institutional baggage and one for to.

-- ford.

I believe in pattern recognition.

That means you have seen a series of events or occurrences that have happened before and it will cause the same problems.

Pattern recognition to work across industries, i do believe in that.

The idea is the ceo has to have a message and keep repeating it.

She absolutely does.

Communication today in every format, they have to have a blog . they have to go on television.

They have to have an earnings release.

Communication has risen to the top of the competencies required for success.

How much time should we give a new ceo before giving him or her a grade?

The minute he or she takes that seat we are criticizing.

How long should we give them?

At least a year.

Pour mary barra steps into general motors.

If they can get a year they are lucky.

How do they handle the first crisis?

That is important as how long you give them.

It is insensitive that the media is asking about what j.p. morgan will do.

Do you have to get real and saying we need a safer plan?

When you have an iconic leader, there are shareholders who are putting wealth in his leadership.

I don't think it is insensitive.

It is unfortunate, but you have to know the predictability of the success of j.p. morgan.

He has a great bench.

He knows how to develop people.

J.p. morgan is going to be fine.

Thank you so much.

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change