BofA Fumbles Succession Plan: Firing Line

NEW YORK (TheStreet) -- Embattled Bank of America(BAC Quote) CEO Ken Lewis' surprise resignation announcement apparently caught the board of directors off guard as they dined in the first- class lounge. But those of us in steerage class saw this iceberg coming from miles away.

I guess the board believed that the public lynching in front of Congress (to be continued) and the multiple investigations by New York Attorney General Andrew Cuomo were somehow pleasant experiences. Along with G-men sitting in the backseat, who wouldn't want to hang on to that job?

In a previous Firing Line column, I said succession planning is a weak area in many companies for various reasons. Many boards are comprised of people the CEO hand picks and many CEOs believe they are immortal (see Richard Fuld of Lehman Brothers).

When a CEO or other heavy departs unexpectedly with no successor in place or at least identified, it leaves a company rudderless at a time when leadership is required the most, especially if it was a 'no- band change of command'

In this case a board is left to scramble to find a successor and the debate between selecting an insider or outsider begins. Insiders and outsiders both have their own pros and cons and these should be discussed well beforehand.

Companies and organizations that carry out properly contingency planning have thought through this situation and are prepared appropriately. Today TheStreet.com is reporting that BofA's search committee has narrowed the field down to two choices, although the committee is still reviewing external candidates.