Closer Look Series: Topics, Issues and Controversies in Corporate Governance, No. CGRP-05 (Professor David F. Larcker and Brian Tayan, MBA ’03, Date: 6-24-2010)
One of the most important decisions that a board of directors must make is the selection of the CEO of the company. And yet survey data indicates that many boards are not prepared for this process.
In recent years, shareholder groups have pressured boards to increase transparency about their succession plans. While the SEC initially allowed companies to exclude from the proxy shareholder proposals that would require more disclosure, the agency has since reversed its position.
What type of disclosure can provide shareholders with insight into succession planning?