More Board Members Getting Hired as CEOs: An Unwise Corporate Trend
(Daily Finance) — So why has the number of directors being tapped for CEO posts more than tripled in the past year? “The main reason is a lack of proper succession planning by companies,” says Anita Skipper, corporate governance director of Aviva Investors. “The need for prompt management changes during the financial crisis may also have compounded the trend. Boards are more risk-averse. If no one from management can quickly step into the CEO’s position, the ‘safe’ alternative is to choose someone well known to the board, who understands the strategy and business, and may have previous experience as a CEO.”
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