As we enter a new year, CEO turnover is picking up pace, with several major companies seeing shifts at the top. However, what often goes overlooked in these high-profile transitions is the way these decisions are made—and, more importantly, where they are made. At the heart of every executive departure lies a crucial element: trust and confidence. Once a CEO loses that, it’s usually game over. But the process is far from transparent, and the role of the board remains largely misunderstood. To help illustrate this, we’re taking a look at five prominent companies from the Fortune 500: General Motors (GM), General Electric (GE), Apple, Dow Chemical, and Home Depot. Let’s dive into the issues that each board is facing in 2009.
1. General Motors (GM)
GM continues to be one of the most obvious examples of a company on the brink. With significant challenges ahead, either GM will find a way to survive or face Chapter 11 bankruptcy and a complete overhaul. Six months ago, GM’s board, led by retired Kodak Chairman George Fisher, appeared relatively transparent. But with the bailout discussions and board changes, trust in GM’s leadership is rapidly eroding. The current board includes former CEOs, retired executives, and two figures from academia, yet only two active CEOs remain on the board. A lack of diversity in leadership and a complicated governance structure raises questions about GM’s future.
Key Takeaway: With leadership increasingly seen as part of the problem, GM needs to overhaul its approach or risk further decline.
Check GM’s Board of Directors here.
2. General Electric (GE)
GE’s situation is a textbook case of lost trust and a failure to regain confidence. Under Chairman and CEO Jeffrey Immelt, the company has seen its stock price plummet, and investors are losing patience. While Immelt is getting a longer leash due to his experience and the company’s complexity, 2009 will be a make-or-break year. GE’s inability to convince investors that a turnaround is on the horizon raises questions about the company’s leadership and its board’s effectiveness.
Key Takeaway: GE needs to demonstrate measurable improvement or risk a significant leadership shake-up.
Check GE’s Board of Directors here.
3. Apple
Apple’s board has recently been thrust into the spotlight, not for its performance but for questions surrounding CEO Steve Jobs’ health. Jobs’ public admission about his medical issues has sparked rumors about his future at the company. While Apple’s board includes some powerful names—such as former Vice President Al Gore and Google’s Eric Schmidt—the issue of succession remains largely unaddressed. The board’s hesitance to openly discuss a post-Jobs era undermines investor confidence, creating the risk of founder’s syndrome becoming a more significant issue for the company.
Key Takeaway: Apple must address its leadership succession plans sooner rather than later to avoid a crisis of confidence among investors.
Check Apple’s Board of Directors here.
4. Dow Chemical
Dow Chemical is currently facing a significant gamble: its “bet-the-farm” strategy to secure a growth opportunity through a joint venture with Kuwait. However, the global economy is unstable, and Dow has already implemented cost-cutting measures, including layoffs and plant closures. CEO Andrew Liveris faces increasing pressure to explain his strategy in an upcoming investor call. The company’s board is supporting Liveris for now, but cracks are beginning to show as investors grow wary of the company’s path forward.
Key Takeaway: Dow’s future hinges on whether this bold strategy pays off or not. If it doesn’t, the board may have some hard decisions to make.
Check Dow’s Board of Directors here.
5. Home Depot
Home Depot is caught between a rock and a hard place. While CEO Frank Blake has received praise for navigating the company through the economic downturn, he’s not viewed as the leader for the next era of growth. When the housing market eventually recovers, the company will need a more growth-oriented CEO. This shift in leadership won’t come easily, particularly after the departure of influential board member Ken Langone. For now, Home Depot’s board continues to back Blake, but the call for a leadership change may grow louder as the market improves.
Key Takeaway: Home Depot’s board will likely face pressure to find a new CEO once the company enters its next growth phase.
Check Home Depot’s Board of Directors here.
Conclusion:
The challenges faced by these boards are indicative of the broader issues affecting the corporate world in 2009. Trust, leadership, and transparency remain at the core of these organizations’ struggles. As the year progresses, expect to see more CEO turnover and more questions about how boards make their decisions. For now, these five companies are worth watching closely as they navigate a difficult landscape and determine the fate of their leadership.
What’s Your Take?
How do you feel about the leadership decisions at these major companies? Do you think the boards are handling their roles effectively? Share your thoughts in the comments below or reach out on social media.
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