Yesterday I wrote about executive compensation as a huge part of corporate governance that can sound a terrible tone at the top if handled poorly. Today I want to write about another, often-overlooked part of governance: CEO succession.
We should see some fresh action on CEO succession this proxy season. The Securities and Exchange Commission set the stage for that expanded discussion last fall, when it published a legal opinion paving the way for shareholders to put resolutions about CEO succession into the company proxy statement. Historically, companies had the discretion to omit such questions from the proxy; now they don’t. The first large company to face one of these shareholder resolutions is Whole Foods Market. At its March 8 meeting, shareholders will vote on whether Whole Foods should report on CEO succession annually.
