Only 35 Percent of Companies Have a Succession Plan and Apple Is One of Them

February 7, 2011 at 4:00 am PT

Apple may not want to disclose its CEO succession plan, but at least it has one. Which is more than you can say for quite a few other companies.

According to a global survey of 1,300 companies by Korn/Ferry, though 98 percent of companies believe a CEO succession plan to be important, only 35 percent currently have one in place. And 49 percent haven’t had one in place for the last three years.

That’s something shareholders calling for Apple to disclose its succession plan annually might want to keep in mind as they prepare for the company’s annual meeting later this month. On this issue, Apple is actually a leader in corporate governance. And it does have a good rationale for keeping its succession plan private:

A written succession plan would give Apple’s rivals unfair advantage by publicizing its objectives and plans.
Identifying potential successors to Steve Jobs would invite other companies to recruit those people away from Apple.

Sound reasons and ones that seem to outweigh the main reason for making it public: Making nervous shareholders less nervous.

Tagged with: Apple, corporate, digital, disclosure, governance, hardware, innovation, John Paczkowski, Korn/Ferry, rationale, recruit, shareholders, Steve Jobs, succession, succession plan, survey

comments so far. Add yours.

Anonymous

I don’t understand why so many of you “tech” people feel the obligation to defend Apple in any given moment. iSheep.
Anonymous

Not entirely sure what you are saying here Len. Other than to drag out tired words like iSheep and throw in an anti-Apple rant you haven’t provided anything as to why this article is “defending” Apple. It appears to be a statement of fact. 35% of companies have a succession plan and Apple is one of them. I’m not entirely sure where the “defense” comes in?
Anonymous

The simple act of digging out these irrelevant statistics to prove that Apple isn’t doing anything wrong is a form of defense. If this were happening to another company, I don’t think people would bother digging up stats to defend them.
Anonymous

The simple act of digging out these irrelevant statistics to prove that Apple isn’t doing anything wrong is a form of defense. If this were happening to another company, I don’t think people would bother digging up stats to defend them.
Anonymous

Look over the proposal I linked to in the post and tell me if you see a sound rationale for public disclosure of the succession outlined. I don’t, but maybe I’ve missed something.
Anonymous

And I don’t understand why you can’t keep your displeasure to yourself and feel such an urge to denigrate people.
Anonymous

Quite right. Publicizing any succession plan will bring more uncertainty. Investors have to worry about the plan being undermined by competitors.
Anonymous

Hmmm. So you’re all for the company painting target signs on the chosen for the competitors to come in and poach? Yeah, as a shareholder that’s a great idea. For every call out for this kind of action is usually backed by institutional shareholders who are pretty bad when it comes to this sort of thing.

They are calling out for a succession plan to be in place. Yes that’s a good idea. In fact it is such a good idea that Apple have acted on it. Making public the details of the succession plan is dumb, dumb, dumb.
Anonymous

First off, I have nothing against Apple’s stance in this matter. In fact I agree with their stance. It’s just that Apple enthusiasts are so desperate to defend their company that they need to go as far as pulling out statistics that no one really cares about. This isn’t Apple’s fault and I don’t blame them for their actions. I just find their supporters try too hard to fight for Apple as if they need to justify Apple’s every move. That’s why I mentioned iSheep.
Anonymous

So your stance is saying that you have nothing against this and yet your comment was:

“I don’t understand why so many of you “tech” people feel the obligation to defend Apple in any given moment. iSheep.”

And to prove your point you decided to post a provocative post? Awesome work. I think that is called trolling.
Anonymous

Well, because the group that is trying to get Apple to publicly disclose this information is being extremely vocal about it. And the anti-Apple press always love to hang on these types of stories without completely explaining the situation across the rest of the industry.

So here we have an article that actually does give us perspective and like clock-work, here you are, an anti-Apple troll, needing to say something against it.
http://panlilio.blogspot.com/ Victor Panlilio

Since ‘Len1023′ is unwilling to post under his real name, we can assume that he is unwilling to be held accountable for what he posts. On Slashdot, this type of person is called an ‘Anonymous Coward’ and the term seems to fit. Man up and post under your real name if you want some respect.
http://panlilio.blogspot.com/ Victor Panlilio

As an AAPL shareholder, I commend the Apple Board for having a CEO succession plan. I don’t necessarily need to know what it is, I just wish to see the company keep making healthy profits and have my shares increase in value. The job of the management team at any publicly traded company is to increase shareholder value, and the Apple management team have done this, in spades.
Anonymous

@Victor – Yes posting under an alias makes me a coward..Well I guess that makes you an online sensation. Congrats.

@rattyuk – I own Apple products, I have nothing against their products. It’s the unconditional fanboys that bother me. Apple takes the cake on having the most diehard, stubborn supporters. Not all of them, but many will go to great lengths just to prove Apple is king. Basically Apple can do no wrong. This article is written with that mindset. A culmination of irrelevant statistics just to backup Apple’s stance.
Anonymous

Offering a reasonable explanation is great. Saying, “hey look, these people aren’t even doing it!” “Apple is already doing better than most companies” and offering pointless stats is where it seems like whining. I respect a reasonable explanation of Apple’s stance which was somewhat offered. However the stats and title “Only 35 Percent of Companies Have a Succession Plan and Apple is One of Them” makes it sound fanboyish.
bradisrj

@Len – I don’t think any “isheep” are irrationally defending Apple. The only reason for John’s article is that anti-Apple folks (I won’t characterize them – not that I don’t want to) seem to irrationally lash out at Apple for not having a succession plan. Therefore, John studied the statistics and existing research (as a journalist should) and published this story.

I think you are overreacting to the message – which I believe can be summed up as: A lot of folks seemed up in arms about Apple and a succession plan, with some justification based on Steve Jobs recent health issues, so I (John) researched the it. I found that almost all companies believe having a plan is a good idea, but a minority actually have one. Apple does have one. They don’t make it public for various reasons. Journalistic questions asked and answered. John then goes to his editorial voice and states that he agrees with Apple’s reasons.
Anonymous

OK that really does make a lot of sense dude. Wow.

http://www.ultimate-privacy.tk
bradisrj

No Len, you have it wrong. It is editorializing (a bit); but since the stats bear the writer out, so it isn’t “fanboyish”.
bradisrj

I’d “like” to know what it is, but I understand and agree with the reasoning that keeps the plan under wraps.
zato

I took a look at your past posts here at ATD. You are an aggressive defender of all things RIM. Especially the Playbook. So much so that some might guess you are being paid to do so, along with “Jon Peters”.
http://panlilio.blogspot.com/ Victor Panlilio

@Len1023 – if you ever communicate with me again using anything other than your real name, I will pointedly ignore you, as I ignore all the spammers who pollute my inbox at work.
Anonymous

@Victor – it’s too bad. If I were an Apple enthusiast you wouldn’t mind me not using a real name. Don’t be so fickle. I feel like a piece of me just died since you are ignoring me :( boo hoo.
Anonymous

I think the probability of me being paid to comment, is much lower than the chances that these “journalists” are being paid to write. Lol, this is exactly what I mean, you actually took the time to look up my history to prove a point? That’s pretty hardcore. You know why I aggresively defend RIM recently here? It’s because this site and most of its readers are so blinded by the mighty Apple that it’s the only thing they believe in. WSJ in general is like this. If this isn’t apparent to you, then I’m afraid the distortion field is stronger than I thought.
http://twitter.com/lemieuxd David Lemieux

Man did you pick the wrong battle! Here is a company that has “say on pay” and as mentioned above, a succession plan. Add to that, a CEO who has been making great effort at assuring that shareholders can “see” what talent is available from within, to take the reigns if required. Just check the last 2 years of keynotes and presentations to see how SJ has made a point of letting the other execs “strut their stuff”.
Has RIM been as open? Why don’t you do some research and get back to us. I for one as a Canadian Apple fan have an interest in both firms. I would like to see how well RIM is governed. Perhaps both firms are amongst the best. From this article we see few are.
http://twitter.com/lemieuxd David Lemieux

There is another problem, as stated in this article. This company is firing on all cylinders. To show their plan means to tell the other 7 cylinders that they are not IT. As a competitor or even non-competitor in this field, I now know that I have a choice of 7 top-flight cylinders which are far more likely to change engines then before. And this even before the CEO leaves!
http://twitter.com/lemieuxd David Lemieux

Len, The sad thing is that few other companies are actually doing anything. Perhaps because their leadership can be found at any Dollar Store. Perhaps because they are bad leaders and don’t give a hoot about investors. I don’t know. All I know is as a Canuck whose pension was heavily invested in Nortel (not out of choice, Nortel was simply that big here) I have become more sensitive to such issues. To find so many journalists picking on the one company which is actually doing well, kinda bugs me. It makes no sense. As I asked before, how well managed is RIM. Like with Nortel, we may need to dig deeper to know.
Anonymous

“I own Apple products, I have nothing against their products.”

I revision one iPod by any chance? Or maybe a nano? It’s not much of a call to claim to own their products. Which Apple products do you own?

“It’s the unconditional fanboys that bother me. Apple takes the cake on having the most diehard, stubborn supporters.”
There you go. Using the word fanboy to denigrate anyone who has a different opinion from yourself is not very good going len.

You have filled this entire posting with anti-Apple drivel and tried very hard to make a point where there was none. Did you get up on the wrong side of the bed today?

“Not all of them, but many will go to great lengths just to prove Apple is king. Basically Apple can do no wrong.”
Apple’s share price is around 350 today. I paid 12 back in ’97. So I suppose having two stock splits and a rise up to 350 makes me some kind of fan boy. Are you saw because you didn’t make the jump and now wish to denigrate anyone who did?

“This article is written with that mindset. A culmination of irrelevant statistics just to backup Apple’s stance.”
As I mentioned before. They are not irrelevant stats they are actual facts. But hey you’re accusing us of being fanboys? Sounds like a hater’s gotta hate.
Anonymous

The only good reason to call for the disclosure of the succession plan is to short Apple stock. There is a well-known history of exploiting the Steve-Jobs-leaving-Apple dynamic to short the stock.

For what it’s worth, Steve Jobs also said Apple is working from a plan that goes 25 years into the future, so if you think there is another tech company better prepared for the next 25 years, you should invest in them.
Anonymous

I defend Apple when they are unfairly criticized because their products save me time and money every day in reduced I-T costs and make me time and money every day in enhanced productivity compared to everything else on the market. It’s painfully simple.
Anonymous

I’d like to know what the 2013 iPad looks like, but I understand why that is under wraps, too.
Anonymous

Simply because Apple customers are known to be the most loyal in the industry and refused to be assimilated by the Borg.

Only 35 Percent of Companies Have a Succession Plan and Apple Is One of Them

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