Though he says he isn’t going anywhere anytime soon, Steve Roell, Chief Executive Officer of Johnson Controls, Inc., recently told the Milwaukee Journal Sentinel he spends a considerable amount of time on succession planning.
From the story: “…He calls it employee development — evaluating the top 100 or so executives in the company on a matrix of nearly three dozen personal attributes and strengths that are needed to be a global leader for the multinational corporation.”
Succession planning is vitally important to a company’s success — and it’s among the services IntoGreat provides. A recent study released by international consulting firm, FTI Consulting, examined 263 CEO transitions at global public companies from 2007 to 2010. Researchers found that planned CEO successions led to a smaller range of stock price movement from the day of the announcement of an executive transition to more than six months later. As the study notes:
“.. The reputation of a CEO is a critical factor in investor decisions to buy or sell a company’s shares. In fact, on average, nearly a third of investment decisions are based on perception of the CEO. As a result, leadership transitions put a significant portion of the investment decision at risk as opinions of the new leader are formed.”
The study also found that investors care deeply about the reputation of a CEO when they’re deciding whether to buy or sell shares. On average, nearly a third of investment decisions are based on the perception of the CEO, according to FTI’s research.