Private Company Series: Planning for CEO Succession

In the world of emerging growth companies, long before a company goes public, boards of directors have to navigate founders who are CEOs or chief technology officers (CTOs) who have stepped away from the business—or who don’t know when it’s time to.

The OpenAI boardroom controversy in November 2023 exemplified the dangers of board dysfunction, the disconnect between legal authority and actual control, and how things can go wrong when CEO succession is not well planned or executed.

If a board of directors has one job, it is to hire, retain, compensate, and fire the CEO for the benefit of both stockholders and stakeholders. But when the identity and future of an emerging private company are so tightly intertwined with its founder CEO or CTO, how can boards of directors effectively do their job?

In this session on CEO succession, we addressed questions like:

• What are the differences between managing a founder CEO and a professional CEO?

• How do you incentivize each for success?

• How do you manage each for value?

• How do you navigate problems?

• What is the role of legal counsel?

Although this event focused on private company governance, it was an insightful panel discussion for all board directors.

Thank you to our generous sponsor for hosting this event: