A Playbook for Unplanned CEO Transitions

While boards of directors routinely engage in succession planning for the company’s chief executive, fewer have planned for a scenario in which the CEO dies, unexpectedly departs, or is temporarily or permanently incapacitated.  If a board takes the time in advance to think through key issues, resolve some threshold questions for how an emergency CEO transition would be managed, and request that management consider the filings and scripts that would be necessary, the company will be far better prepared to handle such a crisis should it occur.  Having a fully developed playbook, with protocols and documents ready to take off the shelf at a moment’s notice, can mean the difference between a full-blown crisis and a manageable situation.

Creating this playbook is likely to require uncomfortable conversations among board members and the chief executive.  No matter how young, healthy, and seemingly invincible a CEO may be, anything can happen at any time.  There have been high-profile examples of chief executives who have suffered accidents or medical issues that have temporarily incapacitated them, and others who have experienced professional or personal crises that have necessitated immediate resignation or replacement.  While no one will enjoy contemplating the potential misfortunes that may befall the company’s leader, an emergency scenario is likely to resolve in a manner more advantageous to the enterprise if it can be handled with the benefits of forethought and advance planning.  Involving a public relations/investor relations firm that specializes in crisis management can make it easier for the board to consider these difficult issues.
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