Boards That Lead

8.

Spotting, Catching, or Exiting a Falling CEO

Like neutrinos and Higgs bosons, early signs of a faltering chief executive are often hard to detect. Most chief executives are constitutionally optimistic, and since by definition their role is to surmount challenges, the tenor they bring into the boardroom is likely to be relentlessly upbeat. Taking executive overassurance into account will aid directors in detecting nascent troubles ahead, but it is only one piece of a very complicated puzzle.

Spotting a Falling Chief Executive

From our several decades of witnessing more than fourscore fumbling CEOs, we have noted that, in virtually every case, warning signals were noticed early by at least one or two directors but were commonly not shared with ...