Lame Duck CEOs

The process of replacing key individuals is crucial to organizations’ performance. This is as true for presidents of countries as it is for CEOs. When a firm announces the departure of a CEO without announcing a successor, the incumbent CEO becomes a lame duck. Consistent with the name’s pejorative connotations, some market participants argue that firms with lame-duck CEOs suffer from a lack of leadership that may create high levels of uncertainty and stall important decisions. This has prompted the SEC and other regulators around the world to require more disclosure of succession plans.[1] For example, in October 2009, … Read more