The sudden death earlier this week of Christophe de Margerie, chairman and CEO of French oil giant Total SA, is a grim reminder that companies must think about the unthinkable – and have a plan when the unthinkable happens. De Margerie was killed on Monday evening when his private jet collided with a snowplow on the runway while taking off from Moscow’s Vnukovo Airport. Three crew members on the flight also died.
Total and its board rightly are credited with moving swiftly to name a new chairman and a new CEO in the wake of de Margerie’s death, taking the opportunity to split the positions. De Margerie died shortly before midnight Moscow time on Oct. 20. Total’s board of directors and ethics and governance committees met in Paris the next day. The new chairman and new CEO were appointed by the board on Oct. 22 – less than 48 hours after de Margerie’s death.
Financial Times management columnist Andrew Hill had a fascinating piece this week in the FT Business Blog, describing a CEO’s sudden death and succession as “any company’s worst nightmare.” The piece cited Conference Board research finding that while three-quarters of companies have succession plans in place, only 83 percent of those were ready for an emergency transfer of power. The FT blog also included a table of CEO sudden deaths, succession announcements and stock market reaction from 1994 through 2012, compiled by researchers at the Stanford Graduate School of Business.
The Wall Street Journal’s online management column explained Alcoa Corp.’s board process for identifying and assessing as many as 20 top executives who could succeed the CEO if needed, and cited Stanford research indicating that about seven CEOs of publically traded companies die each year. Companies whose CEOs died suddenly within the past decade include Micron Technology, McDonald’s Corp. and Sigma Aldrich.
Our three recommendations for companies thinking about CEOs and mortality:
• Have a CEO succession plan in place that includes the possibility of sudden death or disability, possibly with an interim CEO, and have it vetted by the board
• Remember that communication with employees about a CEO’s demise is every bit as important as external communication, as employees may be traumatized and fear what it means for the company’s future
• Make humanity and respect for the CEO and his or her family a central plank of your communications planning – as Total did, for example, in beginning its announcement of successors to de Margerie with a tribute to his leadership