The seeming increase in these kind unplanned departures reflects increased transparency and accountability around personal and corporate scandals (former Hewlett-Packard CEO Mark Hurd, for example) as well as the increasing stress load of the top job, say PR pros.
Gene Grabowski, SVP, chair, crisis and litigation for Levick Strategic Communications, says “the demands of the modern CEO's time, as well the public scrutiny he or she faces, is greater than ever before.” He says in addition to running the organization, CEOs often have many demands placed on them in terms of communicating to various audiences, from video conferences for institutional investors to making speeches to key customers.
“A CEO's schedule is not his own and for some of them [resignation] is the only way they can get an extended vacation,” says Grabowski.
The latter issue was reflected in the recent retirement of Pfizer CEO Jeffrey Kindler, who said in a statement he needed to “recharge my batteries” following a “period extremely demanding on me personally.”
Jason Schechter, chair of US corporate practice at Burson-Marsteller, says the messaging around a CEO exit can be a challenge for the corporate communications team. But he said Kindler (and, by extension, Pfizer) wins point for being relatively candid about the reason for his decision.
“CEO departures happen for very different reasons, but I think people appreciated the candour of Kindler's decision because getting burnt out is something a lot of people can relate to,” he says.
(His reason was also reinforced in media reports quoting off-the-record sources like this one in The Wall Street Journal).
Ray Kerins, VP, worldwide communications and head of global corporate media relations for Pfizer, could not be reached for comment on this article.
Grabowski says it was smart move for the company to communicate a succession plan. That is reflected in the fact that Pfizer shares increased modestly following the news.
“Without a plan, staff morale can dip and confusion and chaos can ensue as people jockey for position. So a succession plan calms and stabilizes your in-house team. Second, it calms your market and retains external confidence with shareholders, customers and consumers. And third, planning for the most important position in the company brings stability to other parts of the company,” he says. “Overall, it brings stability to the company as an entity.”
More companies, both public and private, are recognizing the need for succession planning, adds Grabowski. “At any given time, we're working on two succession plans,” he tells PRWeek. “That wasn't the case five years ago.”
At the very least, Schechter says a company should have an interim management team in place and communicate its transition plan to its various stakeholders as it looks for new leadership. But more than that, he says the departure of a CEO (and subsequent hire of a new one) can give a company a receptive platform to talk about its vision.
“I think it is always good for organizations to celebrate the past and embrace the future,” he says. “During a transition highlight, you can talk about what is strong about your company and what makes it great but also address forward looking strategies and what vision you have in continuing to grow in the marketplace.”