ON NOVEMBER 24th Louis Chenevert, the chairman and chief executive of United Technologies, resigned abruptly without explanation. The rumour mills began to whirr: the American giant, which makes helicopters, aircraft engines and lifts, is not given to delivering surprises. But the company acted immediately: Greg Hayes, the chief financial officer, was quickly promoted to CEO, and Edward Kangas, the firm’s lead independent director, was made chairman. Analysts praised the swift decisions, and the company’s share price rose.Yet two days later shares in Thomas Cook, a travel company, plunged when it said its boss, Harriet Green, was leaving and that the executive who had been preparing to succeed her, Peter Fankhauser, would slip smoothly into her seat. Even when firms have a succession plan, investors may still take fright when it is carried out, especially when the departing boss has been as successful as Ms Green. But the risks are far higher when there is no plan, and this is often the case. A survey this year by the National Association of Corporate Directors found that two-thirds of American public and private companies had no succession plan. Another survey,...
from The Economist: Business http://ift.tt/1FvK0I1
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