Rupert Murdoch
Rupert Murdoch’s plan to step down as chair of News Corp and Fox and appoint his son Lachlan Murdoch to lead may be a case of putting legacy over competency, according to Binghamton University Assistant Professor of Strategic Management Andre Havrylyshyn.
Companies can lose billions when they pick the wrong CEO, said Havrylyshyn. Succession planning is considered important amongst boards of directors, but they often drop the ball due to lack of time, or CEOs sabotaging their attempts to find a suitable replacement. Another issue occurs when CEOs are so concerned about passing their leacy into competent hands that they get too involved in the succession planning process.
“Are they grooming the person to basically be a replica of themselves,” said Havrylyshyn, “or are they doing what we know from the research is really what we should always be doing for CEO succession planning – which is you look at the external environment and you ask, ‘What is the CEO of this firm for tomorrow going to need?’”
“Maybe this is a case where Rupert Murdoch has been highly involved, especially because it's a family transfer in grooming his son to be the next CEO. But that might be problematic in that if he has just been trying to create a carbon copy of himself. There's no guarantee that's going to work out for the firm or society or really anybody.”
Havrylyshyn wonders if the boards of director at Fox have been grooming someone else to succeed Murdoch.
“Lachlan's now going to take over, but he may have only been recently identified as a potential candidate,” said Havrylyshyn. “If it's possible that a different child of Rupert Murdoch is the one who'd been getting all of the attention and being prepped for the job, and now, at the last minute, they've gone with Lachlan. I haven't read enough to say that that is what's going on, but that's what I would want to know. I would want to know who has the board of directors been developing, if anybody? Or maybe they just have ignored CEO succession planning.”
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