Robert Stickler, a spokesman for BofA, said in a recent USA Today article, "There was a succession plan in place, but the board didn't have time to execute it, given the suddenness of this decision."
Of course, that's the point of a succession plan: to avoid the need for "sudden" execution. And it's not just Bank of America that could learn from D&B's planning process or JPMorgan Chase (JPM - Get Report), which also went through a leadership debacle due to lack of planning.
The U.S. Conference Board published a survey in August that indicated over 50% of U.S. public companies surveyed in 2008 did not have a detailed plan for CEO succession. According to that same report, of the 1484 CEO departures in 2008, 46% of the successions were unplanned. Given that the median tenure for a corporate CEO is around five years, it is essential that succession planning become a priority for corporate boards.
This also brings up a previously discussed issue in this column about the conflicts of having the same person as CEO and chairman of the board. It is not hard to understand how the board may avoid discussion CEO succession when the chairman is the CEO. The strength of that model depends entirely on the strength of the individual holding the dual roles. This is not a formula for consistent and stable performance.In the case of D&B, whatever happens with their business results over the next few months, it will not be because of over concern about leadership. Sara Mathews has been president and chief operating officer since 2007 and has been on the board since 2008. Her time at D&B was preceded by 18 years with Procter & Gamble (PG - Get Report), where she delivered a strong record of results in her various executive positions. We don't have to wonder about this because the board clearly has it under control. When succession plans are as transparent as those at D&B, we can focus more on the business and less on the rumors around who may be the captain of the ship. -- Written by Todd Thomas in Southfield, Mich.