Strategic Human Resource Management
Edward Bennett has done wonders at Astar Enterprises. In the 15 years he's been CEO, the company has more than tripled in size through product line extension and disciplined acquisitions and is now distributing its cleaning, personal hygiene, and skin care products nationwide.
But Astar's chief executive is 64 years old, and while all his attention is taken up with a new strategy to expand into international markets, board members are becoming increasingly worried about the issue of succession. Bennett wants none of it, arguing that if he were to die suddenly, his second in command, Tom Terrell, could take over. Besides, after much prodding, Bennett, former vice-chairman Vincent Dalton, and longtime HR head Gail Thompson have already come up with a list of four possibilities. "When will these guys back off?" Bennett complains to Thompson. "I've told them who the candidates are. Why do we need to talk about it?" Thompson knows, however, that the board chairman, Tom Calloway, considers Terrell a nonstarter without the requisite skills to take over in anything more than an interim capacity. As for the other three candidates, only one is even known to the board, and none has any significant international experience. Calloway is well aware of how critical Bennett is to Astar. But he's equally certain that the board risks failing in its fiduciary responsibilities if it doesn't create a viable succession plan. What should Calloway and the board do if Bennett refuses to cooperate?
Commenting on this fictional case study in R0609A and R0609Z are John W. Rowe, the executive chairman of Aetna; Edward Reilly, the president and CEO of the American Management Association; Jay A. Conger, a professor at Claremont McKenna College and London Business School; Douglas A. Ready, a visiting professor at London Business School; and Michael Jordan, the CEO of EDS.
This HBR case study includes both the case and the commentary. For teaching purposes, this reprint is also available in
But Astar's chief executive is 64 years old, and while all his attention is taken up with a new strategy to expand into international markets, board members are becoming increasingly worried about the issue of succession. Bennett wants none of it, arguing that if he were to die suddenly, his second in command, Tom Terrell, could take over. Besides, after much prodding, Bennett, former vice-chairman Vincent Dalton, and longtime HR head Gail Thompson have already come up with a list of four possibilities. "When will these guys back off?" Bennett complains to Thompson. "I've told them who the candidates are. Why do we need to talk about it?" Thompson knows, however, that the board chairman, Tom Calloway, considers Terrell a nonstarter without the requisite skills to take over in anything more than an interim capacity. As for the other three candidates, only one is even known to the board, and none has any significant international experience. Calloway is well aware of how critical Bennett is to Astar. But he's equally certain that the board risks failing in its fiduciary responsibilities if it doesn't create a viable succession plan. What should Calloway and the board do if Bennett refuses to cooperate?
Commenting on this fictional case study in R0609A and R0609Z are John W. Rowe, the executive chairman of Aetna; Edward Reilly, the president and CEO of the American Management Association; Jay A. Conger, a professor at Claremont McKenna College and London Business School; Douglas A. Ready, a visiting professor at London Business School; and Michael Jordan, the CEO of EDS.
This HBR case study includes both the case and the commentary. For teaching purposes, this reprint is also available in