CEO sucession and assorted reputation things

April 27, 2014

CEO sucession and assorted reputation things

A few CEO related items that I came across this week. I decided to bunch them altogether in one post …in the name of efficiency. 

  • I was reading an article from David Larcker and others in the Stanford Closer Look Series. I met David years ago when he was at University of Pennsylvania’s Wharton School and he helped me draw a correlation between the rise in CEO reputation and business performance. So I am indebted. He recently wrote Seven Myths of CEO Succession and in his first myth, he writes that most companies know who their next CEO is (WRONG). Well, surprise surprise. In research done by the Corporate Governance Research Initiative at Stanford University Graduate School of Business and which he is a Director, only 54% of companies report grooming a potential successor to the current CEO and 39% say that they have no viable internal candidates to replace the CEO if it should happen that moment.  I was also intrigued by another myth which was that Boards know how to evaluate CEO talent (NOT EXACTLY). In another study conducted in 2013 with The Miles Group and the Rock Center for Corporate Governance, the report found that Boards place considerable emphasis on financial performance (such as accounting, operating and stock price results) when it comes to CEO performance evaluations and not enough on non-financial metrics (such as employee satisfaction, customer service, innovation and talent development). From experience, the latter can make or break a CEO’s successful tenure and should not just be considered a nice-to-have.
  • Brandfog came out with a second study on social CEOs. It is among 1,000 employees in the U.S. and U.K. and results in the U.S. are compared to a similar study in 2012. The study found that social media engagements is perceived to make for better CEO leaders — only 45% of US employees thought this in 2012 whereas in 2013, the figure was considerably higher at 75%. Also, 82% of employees believe that CEO social media engagement helps to communicate company values and shapes a company’s reputation. I’d have to agree. In addition to social CEOs being seen as more transparent and trustworthy, it is seen as an effective way to prevent crises and mitigate risk by nearly 80% of those surveyed.
  • Also found this useful article on how to get nonprofit CEOs to be more social. 
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Leslie Gaines-Ross
Leslie Gaines-Ross
lesliegainesross@gmail.com

As Weber Shandwick’s Chief Reputation Strategist, I focus on the ever changing world of reputation. For the past 25 years, I have relentlessly observed, researched and commented on the rise and fall of reputations.

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