Abigail with attitude: Why do CEOs ignore a key part of their role?
It occurs to me that none of the major banks has a proper CEO succession plan in place. Think about UBS, Credit Suisse, Barclays, Goldman Sachs and even HSBC. Who would step into the breach if the current chief fell under a bus?
And in some cases, such as JPMorgan, the incumbent chief totally dwarfs his subordinates. Why is this happening? Is it insecurity and paranoia on the part of the current chiefs? Are they simply too busy to focus on this subject that should be close to shareholders’ hearts?
Why don’t regulators insist that there is a proper succession plan in place at our leading financial institutions? If it were known that the chief executive of XY bank could be replaced by a colleague, might compensation for XY bank’s chief decline? After all, shareholders would be reassured that the chief is not indispensable. And if someone is not indispensable, their intrinsic worth is devalued.
You could also look at this a different way. Given that we are paying these chiefs so much and given that the most important part of their job is their legacy, shouldn’t we insist that the day they start in the corner office, they earn their princely stipend by spelling out who will succeed them. What do you think?