How to Smooth Out Executive Transition Periods

The CEO of Sainsbury's, Justin King, announced that he will be stepping down as CEO of the UK supermarket chain. During Mr. King's tenure, Sainsbury's profits have more than doubled, along with its number of stores. Mike Coupe, who has been with Sainsbury's since 2004, will act as CEO designate, but it's expected that Mr. King's legacy will be a difficult act to follow.

In light of the shakeup at Sainsbury's, Faegre Baker Daniels partner Melanie Wadsworth authored an article which appeared in International Business Times. Her article highlighted steps companies should take to prepare for a smooth transition of leadership while minimizing the impact on business. Wadsworth stressed that companies should abide by the UK Corporate Governance Code when planning a change in leadership, and that boards would be wise to be proactive and have a shortlist of successors ready when a departure is announced.

Wadsworth added that even if the new leadership will come from within a company, carrying out an external search can be a benefit as it will assist in identifying talent that the board would like to see in its new leadership.