IR therefore I AM

Within days of each other two CEOs announced their intentions to step down. Sara Lee Corp. Chairman and CEO Brenda Barnes announced her decision to step down permanently to focus on improving her health following a stroke. Barnes, 56, had been on temporary medical leave since May 14. Days before Ms. Barnes’ announcement, Much-heralded Hewlett-Packard chieftain Mark Hurd resigned due to "circumstances surrounding a claim of sexual harassment." In both cases interim CEOs have been named; however, Hewlett-Packard’s shares went into a tailspin on the news.

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While CEO succession rates at the world’s 2,500 largest companies held steady at a high annual rate of 14.3% in 2009, the number of chief executives actually forced from office fell in nearly every region and industry, according to Booz & Company’s 10th annual CEO Succession Study. The report finds two clear trends are reshaping the life of the CEO in the 21st century. First, while succession rates have standardized across regions and industries, boards, regardless of country or sector, are converging on the same preferences for hiring insiders and splitting the CEO/Chairman roles. Second, CEOs are being asked to deliver results in a shorter period of time.

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The media devoted a significant amount of coverage to the bonuses being paid by Goldman Sachs in the run-up to the release of the firm’s earnings. Among the legions covering the story was CNBC’s Charlie Gasparino who discussed the PR dilemma the company faced. In the wake of his story, I was asked to comment (everybody else was probably off that day). My remarks can be found here.
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Once again, the time for the quarterly earnings conference call is upon us. For
some, this causes much wailing and gnashing of teeth (particularly as the CFO
pours over the books looking for the last penny or two he might have missed
or battles his outside auditors over one issue or another). For others,
it is a normal course of business activity as they typically have the routine
down to a science.

The quarterly conference call offers management the opportunity to shine,
get the company’s key messages across, present insights into its strategic
plans, and discuss the progress of its turnaround program, among other important
items. Perhaps, most importantly, the conference call enables management
to talk directly with the company’s investors and provides them with a forum
to question management. How well your company prepares for the call will
go a long way in burnishing your company’s reputation and standing.

We offer some insights into facilitating a good conference call:

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Given the rate of executive departures these days, one would think that CEOs’
offices are equipped with revolving doors or that somebody has declared open
season on them.

So what does this mean to you? At some point in your career, you will be charged
with announcing the departure/retirement of your corporate chieftain and the
coronation of his successor. Planned successions are relatively easy whereas
those that are somewhat contentious require skill as you seek to minimize fallout
and preserve your company’s reputation.

In addition to a succession plan, companies need to have a communications
program in support of a CEO transition — either planned or unexpected. Careful
planning is essential to insure that the transition is smooth and that all
of the company’s constituencies are addressed. Here are some insights into
the process:

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Welcome to IR-IAM’s inaugural post. This space will offer insights, tips and
tricks of the trade for the investor relations professional. We’ll cover the
issues, regulatory changes (and challenges) and news that is important to the
practice of investor relations. We’ll offer straight talk with a touch of irreverence
as we work to inform and interpret and, perhaps, to amaze and surprise. We
hope to bring you things that will make your life easier by helping you make
your CEO happy…

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