The resignation of Gary Forsee, the now former CEO of Sprint, ushers in that rare time of year when boards conclave to "assess" their CEO leadership. Proxies are being written and rehashed, and for a chosen few, axes are getting polished. If you listen quietly from October to December, that whispering sound is scuttlebutt about who is on the way out and who is on the way in.
Forsee's resignation follows a board decision to put out a public search for new candidates. That's probably not the best way to proceed, but then again, maybe they'll get what they're looking for. No one knows except the board, which now seems to be running the company. That's never good.
Within that same sector, pay careful attention to the line between watch to oust on Ed Zander at Motorola. Different situation than Sprint, but at the core, same dilemma: Can we have trust and confidence that this CEO's leadership will propel the company's growth over the next five years? On the surface, the answer is nearly always no. But it's not the board's role to make snap decisions in a vacuum. They must think outward and long-term vs. inward in their own personal interests.
Other candidates for the Watch to Oust list include: Patricia Russo at Lucent/Alcatel, Stanley O'Neal at Merrill Lynch and Charles Prince at Citigroup. Both O'Neal and Prince have some leadership to do on recent billion dollar losses in the credit markets. Bad risk is bad risk -- we get it. But that shouldn't provide an excuse for poor judgment. They didn't provide accurate pro-active or even reactive guidance, and in Prince's case, simply compounded a string of errors that raise questions of judgment.
And while we love the touch of the Saudi Prince's endorsement of his fellow Prince reported in The Wall Street Journal, it's nearly the equivalent of New York Yankees owner George Steinbrenner coming out and saying, "Joe Torre is our man." Be very weary of public endorsements during a crisis. The outcomes are rarely positive.
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