Heavy on celebrity, light on social commentary
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Chapter one, corporate news. Chapter two, financial insecurity. Chapter three, hey, let's run away and join a band, huh?
Huh?
From American Public Media, this is Market Plans.
In Los Angeles, I'm Kyle Risdell. It is Tuesday today. This one is the 3rd of February. Good as always. Have you along, everybody. This is a day ripe in news of the corporate variety. And you will be forgiven if you're thinking you've heard our lead story before. Disney CEO Bob Iger has decided he's going to step down. Again. Yes, this would indeed be Iger's second retirement in the past six-ish years. He came back from the first one in 2022, but, you know, bygones. Josh DeMauro is the new guy.
What corporate news is impacting Disney's leadership?
Been with the company 28 years, most recently running the company's theme parks, whence, as we mentioned yesterday, most of Disney's profits come. Point is, though, House of Mouse is in a long line of companies, nonprofits, even big league sports franchises that have stumbled when leadership tries to pass the baton. Marketplace's Stephanie Hughes gets us going with why succession is so hard.
Choosing a CEO has higher stakes than almost any other decision a company's directors will ever make. But boards don't get the chance to do it that often because good leaders tend to stay put. It's not uncommon to see tenures upwards of 10, 15, getting to 20 years. Yo-Jed Chang is a professor of business administration at the University of Virginia. She says when succession planning is done well, a board gets to know people at the company who could become their next leader. So that could be having dinners with executives around board meetings. It could be having individuals in the firm to come in to do presentations with the board. You want to have someone who's ready to take on the role when it's time.
But Chang says you don't want to anoint them too soon. If everyone in the firm sees like, okay, this is the next person, oftentimes talented people will leave. And go try to be a CEO somewhere else. Another potential stumbling block, when the current CEO gets a little too involved with the process. Deb Rubin is a senior partner at the leadership consulting firm, RHR. It is hard for a CEO to be completely objective about the next phase and who should be there and what their own shadow has been in the organization. And so they are an important input, but they should not be the primary driver. Rubin says the board needs to think about choosing a leader, not just for the company that exists now, but for the company that will exist in the future.
There's a tendency to want to hire a clone if the last CEO has been tremendously successful, and to hire the opposite if a CEO has basically failed. And the reality is it's somewhere in between. The day that a new CEO takes charge, the company should start planning for its next one, says Anthony Nyberg, who leads the Center for Executive Succession at the University of South Carolina. But he says the boards he talks to tend to put off those discussions. Because we're human, it's hard to have conversations with people about your successor. They often don't want to think about when their end might be. A CEO's identity is intertwined with that of the firm, says UVA's Yo-Jed Chang. So you're not just choosing a good leader, you're choosing the next face of the company.
I'm Stephanie Hughes for Marketplace.
Disney shares down just a hair today, about two-tenths percent. More broadly, big tech took a bit of a whacking. We will have the details when we do the numbers.
Corporate story number two comes to us from the food and beverage aisle by way of the snack counter. PepsiCo reported profits this morning. Did quite fine, thanks. Beat expectations, even as it has been selling fewer drinks and snacks in North America. The company's been getting some pressure from some of its big investors to turn things around, which is going to be no mean feat as shoppers are becoming both more cost-conscious and more health-conscious.
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