– Involve the entire board of directors. Banga and Haythornthwaite believed that the entire board should participate in the succession planning process rather than just the nominating and corporate governance committees or a special committee comprising select members of the board. This afforded each director the opportunity to provide their own unique perspective regarding the skills and qualities that MasterCard’s next CEO should possess. – Seek advice from external advisers. MasterCard hired an external leadership advisory firm that conducted impartial analyses of potential candidates. The adviser held personalized coaching sessions and development training for each candidate and provided an unbiased opinion regarding who it believed would be the best fit for the company.
– Transition CEO to board chair. When Banga’s departure was announced, MasterCard also announced that he would become board chair and would work closely with Miebach in supervising the management and affairs of the company. MasterCard correctly anticipated that Banga’s ongoing involvement would provide the company with a measure of continuity in the face of significant change and thereby keep investor confidence high. Banga stepped down as chair of the board in December 2021, thereby successfully completing a thoughtful and intentional planned executive transition. Several other major companies have adopted similar methodical approaches to succession planning that are worthy of emulation. Indra Nooyi left NYSE- listed PepsiCo, Inc. as CEO in 2018 after leading the company for 12 years. Upon her departure, the board revealed that it had followed a rigorous succession planning process. Nooyi had, among other things, worked closely with the board to maintain a list of internal and external candidates, developed criteria for qualities that her successor should possess and provided short-listed candidates with opportunities to lead and learn.
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Governance Insights 2022
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