The Founder, Chairman, and CEO of FedEx Corp, Fred Smith, recently announced that he is planning to step down from the CEO role. We believe the way he chose to do so and some of his comments have bearing on some of the similar succession issues many of our clients face. Interestingly, since FedEx’s founding in 1971, succession planning has been a focus of the organization.
According to recent published information, the succession plan, which is to take effect beginning with fiscal year 2023, was put in place in 2019. Would your organization begin succession planning three to four years in advance? Time goes by faster than you think. Interestingly, the FedEx board even took the step of appointing the successor immediately to take over at the designated point in the future.
So, you officially have someone in the role, for example of a CEO-elect. We often don’t do that in the banking world, but should we consider a board chair-elect, a CEO-elect, a president-elect, etc.? The stability that may provide to our employees or to our markets if we are publicly traded may be important.
FedEx also took this opportunity to appoint a non-executive vice chair of the board who will become the designated successor to the board chair role at some point in the future. Again, that is best practice for a publicly-reporting company and not something required for private companies, but something we might think about as good corporate governance. FedEx is always regarded as one of the best run companies and their role in planning succession in making a smooth transition bears that out. There are lessons in there for all of us
Gerrish Smith Tuck, PC – taken from their recent The Board Chair Forum Newsletter
