Unfortunately, however, the quality of senior-level executive assessment and the board’s involvement in it often leave a lot to be desired. When many of the present-day members of boards were rising in their careers they weren’t exposed to good structures and processes for senior-level executive assessment. So while directors may feel they are on familiar ground when, for example, they’re engaged with financials, they may be unfamiliar with best practices in senior-level assessment. They may even feel a bit uncomfortable with what can seem an amorphous subject. They needn’t. These five principles can help them achieve the clarity that such critical discussions deserve:

Based on 25,000 assessments over a five-year period, we have identified six core leadership competencies: results orientation, strategic orientation, collaboration, team leadership, change leadership and developing organizational capability, which includes developing individuals as well as driving talent management overall.

1. Adopt a behavioral, as opposed to a psychological, approach.Senior-level assessment can have several goals: identifying rising stars, matching people to specific positions, uncovering development opportunities, or planning CEO succession. Psychological assessment purports to tell you who the executive is. We see many clients wanting to use personality tests or employ psychologists to probe the psyches of potential CEOs or senior executives. The approach seeks to gauge such things as problem-solving style, maturity, emotional intelligence, and interpersonal style. By contrast, behavioral assessment seeks to predict what the executive will actually do. Will the executive take swift and decisive action in times of crisis? Will the executive get people on board with dramatic change? Will the executive develop capability within the organization? Although the behavioral approach might include a psychological element, it has the great advantage over purely psychological approaches of being applicable to the business and its results.

2. Use leadership competencies but don’t overcomplicate them.
Assessment rightly focuses on leadership competencies – the abilities that are indispensable for leading people and organizations no matter the industry. These are important because they enable one to go beyond superficial assessments of whether someone is a “strong leader.” However many companies unnecessarily overcomplicate the issue by developing lists of as many as 20 or more competencies they expect in a leader. In fact, far fewer competencies cover the issues of top leadership.

Based on 25,000 assessments over a five-year period, we have identified six core leadership competencies: results orientation, strategic orientation, collaboration, team leadership, change leadership and developing organizational capability, which includes developing individuals as well as driving talent management overall.

Those six things are what business leaders do, unlike people in functional roles where competencies might be more discipline-specific. Beyond these six leadership competencies, lists can become repetitious, unnecessarily detailed, and unfocused. They’re also unwieldy – board members have a hard time keeping them all in their heads and arriving at a clear picture of an individual assessment.

3. Develop a clear sense of what you’re looking for.
Job specifications should be developed in terms of the strategy of the organization going forward. In a time of retrenchment or recession, for example, the role may call for someone with superior operations skills or the ability to do more with less. A growth strategy in global markets may call for someone with international experience and a demonstrated ability to work across cultures. A language of assessment that is behavioral enables you to measure an executive against the results envisioned by the strategy.

4. Develop a common language.
Clear job specifications, a manageable list of leadership competencies, and assessments couched in behavioral terms provide board members with a common language through which they can engage the issues. Tied to action and business results, this language enables them to talk in concrete terms rather than engage in psychological speculation or vague, unfocused discussions. Further, the more they use this language, the more adept they become, continually improving the quality of their participation in senior-level executive assessment.

5. Leverage third-party assessments.
In putting together rosters, top sports teams don’t evaluate only their own players. Neither should companies. They should benchmark internal talent against external talent, continually assessing them against company-specific challenges and behavioral leadership competencies.

Companies that conduct assessment in a vacuum determine only who is the best they have, not the best that they can get, or what “best” looks like from a global perspective. Third-party partners who track talent and are experienced in senior-level executive assessment can bring that wider perspective. Further, third parties that are free of the biases that can inhibit discussion offer a way of surfacing issues that might otherwise go unspoken. And with a behavioral approach, third parties can bring real business discipline to the conversation.

A number of everyday maxims affirm our sense that what people do is more important than who we, or they, think they are: “Actions speak louder than words.” “Walk the talk.” “Lead by example.” A behavioral approach to assessment reflects not only those common-sense sayings, but also the growing empirical evidence that how a person does something predicts success better than his or her qualifications or psychological traits.

In skilled hands, competency-based interviewing probes for competency-related situations and behaviors that are relevant to the job and the company. Instead of simply retracing a person’s achievements, the interviewer focuses on the “how” questions that open windows into the individual’s behavioral characteristics, enabling clear judgment of the candidate’s ability to perform as a leader. Board members who insist on this approach will not only help improve the organization’s capability in assessment but also the board’s ability to oversee it.

Stephen P. Kelner, Jr. and Ashley R. Stephenson are global leaders in Leadership Strategy Services at Egon Zehnder International. They can be contacted at steve.kelner@ezi.net and ashley.stephenson@ezi.net.

There is, of course, a competing view that favors a single person serving as chair and CEO, but with a separate lead independent director. Respected business leaders, corporate attorney Marty Lipton, for example, express a more traditional view that the chair/CEO model is better for driving long-term shareholder value in many companies. Supported by historical data that purportedly shows little correlation between splitting the roles and shareholder value, proponents of the merged role have a point when they suggest that the chemistry needs to be right to split the roles—or else risk adversity between board and management.

With that said, government and shareowners are forcing the issue.  Legislation introduced by Sen. Charles Schumer (D-NY) and Rep. Gary Peters (D-Mich.) would prohibit CEOs from serving as board chairs, while investors have been submitting resolutions with this proscription.  The Securities and Exchange Commission (SEC) is moving to require that companies justify their board leadership structure, and the New York Stock Exchange and NASDAQ have also considered adopting listing rules that would require separate positions with the goal of making boards more independent.  We have only to look at this year’s general meeting of Bank of America—where shareowners re-elected CEO Kenneth Lewis as a board member but stripped him of his chairmanship—to know that a sea change is fast approaching.

The independent chair model has been adopted successfully in Europe, Canada, and Australia as a surefire approach to creating an independent, and empowered, board.   Increasingly, US boards are concluding that separating the chair from the CEO is the right thing to do—to underscore commitment to best governance practices and to ensure a more accountable, more transparent organization.

A non-executive board chair offers several distinct benefits, including:

• Curtailing conflicts of interest

• Ensuring that the CEO is accountable for managing the company in alignment with shareholder interests

• Serving as an objective conduit for the board to express its views on management

• Enabling the board to better fulfill its regulatory requirements and manage risk

• Ensuring that the CEO is effectively guided and mentored in his or her performance

• Gaining clearer focus on corporate succession plans

Whether forced or voluntary, the use of an independent board chair is becoming a reality. If the reality is here, what are the implementation issues and implications?   This article explores immediate questions and practical considerations in separating the roles and managing a smooth transition.

When should we make the split?
In my role as an advisor to boards, I have seen leadership structures transition in a variety of circumstances, some more successfully than others.  One thing that is certain is this:  when the CEO has been recruited for both roles (and, historically, new CEOs assumed that the chair title came with the territory), it is immensely difficult to separate these two functions midstream.  Typically, CEOs are reluctant to relinquish power, and those who do give up the chair role may find it difficult to take direction from a new chair.  Similarly, those who cede the CEO role may be prone to undermining the new CEO’s authority.  Wearing just one hat when one is used to wearing two requires tremendous resolve.

Many companies that have voluntarily split the CEO and chair roles have done so as a result of poor financial performance and pressing shareholder demands.  When the roles are separated due to adverse circumstances, as opposed to a commitment to good corporate governance, the decision to split roles may waver as the financial picture improves.

The most natural transition point is when the current CEO/chair is ready to retire or leave the company.   A leading report from the Millstein Center for Corporate Governance and Performance at Yale University’s School of Management proposes that companies either appoint a separate chair after the current CEO/chair exits—or explain to their shareholders why they chose not to.

Make the division of roles integral to your company’s succession planning and ensure that the issue of board leadership is continuously discussed.  Separation during succession provides the opportunity to carefully evaluate candidates and document the roles and duties of each position—at a time of your choosing when you can implement the process based on good governance rather than in reaction to a negative event.

In the interim, consider strengthening the role of your lead independent director, who can potentially be groomed as the next chair.  Avoid the temptation to have a rotating lead or presiding director, since building relationships and proving leadership qualities over time is crucial to a future transition. Many functions of the chair can be handled by a strong lead independent director. The difference between the two positions may be a matter of time commitment. A non-executive chair may be more effective, however, in reducing what some have perceived as undue influence on the board by a “dual-hatted” chair/CEO.

What is the chair’s role versus the CEO’s?
Once you decide to split these roles, carefully delineate the role of the chair versus the role of the CEO.  This “two-in-box” structure is akin to the CEO-COO structure and similarly adds complexity to the operating structure of the organization. As such, spending time upfront defining roles is critical. Defining the different but complementary duties of these two positions will likely reduce the potential for duplication and conflict between them and reduce the risk of one or both derailing in the role.

In general, the chair runs the board, determines its priorities and meeting agendas (albeit with input from the CEO and other board members), leads board meetings, facilitates communications among board members and the CEO outside of board meetings, builds investor relationships, presides at the annual meeting, and briefs the CEO on issues of concern to the board.  The CEO manages the company and is accountable for corporate performance.  In the split model the chair should not take on company management responsibilities or be involved in company operations, and the CEO should not try to run the board.

What kind of person will make a good chair?
Determine the required experience, skill set, and personal attributes for the chair position.

Look for a candidate who:

• Can lead with confidence
• Can conduct effective meetings and knows where to spend time versus being agenda driven
  • Has emotional consistency and can deal with a crisis
  • Can limit distraction and build consensus
  • Has a Socratic style and can ask hard questions in a constructive way
  • Can solicit viewpoints and listen with sensitivity
• Can be content in the chair role, without a “hidden agenda” of seeking executive leadership in the company
• Can demonstrate continued independence in his or her relationship to management
• Has strong interpersonal  capability and can build “trust” easily with multiple constituencies
• Is a strong communicator and is willing to share information back and forth openly and transparently
  • Has been a CEO (although not required, this is a real plus)

The most important attribute of the chair is the ability to build relationships—among board members, between the board and management, and with the CEO.  Directors must be comfortable in approaching the chair about difficult issues.  At the same time, the chair may at times need to challenge the CEO and must communicate candidly.

The ideal candidate will bring to the table significant leadership experience but at the same time, be content in now playing a less prominent, more supportive role.  Effective chairs have cultivated a collaborative, non-dominating personal style that brings out the most in board members.

How do we delineate the role of chair versus CEO?
Job responsibilities, objectives, and appropriate activities for both positions should be drawn up in writing.  Duties should be clearly spelled out to the board, company employees, and shareowners. The chair job description should also include the amount of involvement and time commitment the position will likely require.  Allocating too much time may increase the potential that the chair will get immersed in daily management activities.  Yet allocating too little time may limit the chair’s effectiveness, particularly if the company faces a major crisis or change.

It is essential to ensure that the chair and the CEO have the right chemistry, with complementary skills and leadership styles. Like Goldilocks’ porridge, their fit needs to be just right.   This takes careful thought and planning, not simply filling an empty chair.   If the “Venn diagrams” of the chair and CEO have no overlap, it will be harder for them to gain alignment, and if they overlap too much, they will gravitate to the same things—creating higher levels of friction. Job descriptions will not only provide a blueprint for finding the right person for each role; they will serve as guideposts for how the two roles will interact.  They will also reduce the risk that either leader will overstep their bounds once appointed.

How long a term is appropriate for the chair?
Most directors today are elected annually.  The chair position is typically a three- to five-year term, but the position is reconfirmed each year—typically through a performance review.

How much should we pay for the position?
The independent chair position is a demanding job, so commensurate pay is a reasonable expectation. The main factor to consider in setting chair compensation is the amount of time devoted to the role, and the amount of money that is fair and equitable for the time invested.  The chair should be paid more than a lead director, but less than the CEO.  A study from compensation research firm Equilar finds that the median incremental pay for non-executive chairs in 2008 was $150,000, compared to $20,000 for the lead director. For those who argue there is little difference between a lead director and a non-executive chair, the pay gap suggests otherwise.

The tipping point to consider is this:  At what level of compensation is the chair no longer independent?  Too much compensation can raise questions of involvement in company operations. A compensation consultant can provide benchmarks for setting the chair pay formula, determining the best mix of cash and equity, and ensuring competitiveness with comparable organizations.

Who takes the lead in the selection process?
Increasingly, the Governance and Nominating Committee has become the epicenter for making decisions n board composition.   These members are tasked with making sure that the board is staffed with the right kinds of directors with the right kinds of competencies, including the chair. This committee should lead chair selection, at some distance from the current CEO/chair.   In later stages of the process, the entire board should reach consensus to ensure those chosen for both positions have full board support.

Before posting the chair position to a wider audience, assess the leadership talent already at the table.  Often, the most effective chairs come from the ranks of current non-executive directors.  Those who are on the board know the business well and, ideally, have already earned the trust of their board colleagues.

How do we assess the chair’s job performance?
The board’s responsibility is not only to elect and support the chair, but to assess his or her effectiveness in role execution.    Performance assessment is recognized as a best practice in governance, and the New York Stock Exchange is increasingly requiring it.

Establish benchmarks for chair performance and conduct annual reviews.  Start with a chair self-assessment and include assessment tools, such as 360-degree reviews, that have been validated by research.  Draw on outside expertise, particularly if you are experiencing problems in chair performance.  Outside facilitation can be an effective tool for board and chair performance evaluations alike. Open and  personal appraisals are crucially important. The chair of the Governance and Nominating Committee should be a senior independent director who can effectively lead the performance assessment process and maintain confidentiality

Taking the proactive approach
In today’s financially tumultuous times, the practices of boards of directors and management are being monitored with ever-increasing vigilance.  The government and shareholders are demanding change, and the expectation for boards to improve themselves will continue to grow.  Adopting independent chairs voluntarily, with careful planning and deliberate execution, is a proactive way to promote responsible governance and retain, or restore, market trust.

Tom Wajnert advises senior executives, boards and directors of businesses in transition.  He  has extensive experience leading large, publicly owned companies, including AT&T Capital Corporation, where he served as founder, chairman, and CEO. He has also served on the boards of several NYSE-listed firms and privately owned companies. For more information, see www.twaj.com.

In 2008, the financial services industry saw the highest rate of forced succession of any industry with 18 percent of CEOs pushed out, according to the WSJ.

One irony of the economic crisis is that it shows some institutions are beyond the grasp of any one person at the top while some of the most highly experienced executives, their reputations in tatters, can no longer even be considered for top roles.

Moreover, several candidates have reportedly turned down CEO positions in favor of lower positions at firms that didn’t accept Troubled Asset Relief Program (TARP)  funds and are therefore beyond the reach of government pay caps.

Overall, the WSJ report concludes, the pool of candidates for succession at financial services firms is shallow.

Hiring a CEO leaves an indelible mark on any corporation. Choosing the right leader can revolutionize a company and create success for decades to come. But the wrong selection can easily take years to correct. As directors look back at their tenure serving on a corporate board, their proudest and, perhaps, saddest memories usually involve the selection of a new CEO.

How can board members ensure that the CEO selection process becomes a fond memory?

Regrettably, selecting a corporate leader has become a static process, particularly since Sarbanes Oxley has forced interviewers to be overly cautious. What’s more, most CEO candidates are polished enough to present themselves in the most favorable light. Interviewers ask the same predictable questions, and oftentimes fail to expose a candidate’s most important character traits.

In truth, few people are prepared to be a CEO and too many fail the first time. Yet what board of directors can afford to hire a leader on a learning curve? With this in mind, search committees must move beyond the classic interview script when they meet a new candidate, and ask themselves these ten essential leadership questions:

1. Is Your New CEO The Smartest One in the Room?

Intelligence is only the beginning of great leadership. Regardless of their educational pedigree, a leader absolutely must possess “commercial intelligence” – the ability quickly size up a company’s goals, and then deliver a winning strategy in a highly-focused manner. The right candidate will not ask what the company wants to do, but will suggest what the company should do.

Does the executive recognize his or her own weaknesses? Does this leader acknowledge when he or she needs input from others? A CEO must welcome help, especially if it’s not his or her area of expertise.

2. Are They As Good As They Think They Are?

The key here: Does the executive recognize his or her own weaknesses? Does this leader acknowledge when he or she needs input from others? A CEO must welcome help, especially if it’s not his or her area of expertise. The only way to become a great leader is to surround yourself with people who have strengths different from your own.

3. Can They Manage Cross-functionally?

CEOs of major companies must deal with brand building, balance sheet issues, and cross-channel distribution. They must be as comfortable in a budget meeting as in an advertising meeting. Boards can no longer hire a single skill set, but must choose a true leader – someone who runs a business by influence across all functions.

4. Can They Stay Involved Without Micromanaging?

Successful CEOs know how often unforeseen mistakes can undermine a business. Most worry all the time. However, leaders must get past the details to serve as the strategic leader of the business. At the same time, they cannot afford to grow too distant from the day-to-day business. The key is to find someone who knows how to manage the balance.

Great CEOs don’t come into an organization thinking they know more than the collective wisdoms of their new companies. They find their way into the culture, establish themselves and then charter a new course for the business.

5. Can They Fit in Culturally?

Leaders are hired for their skills and fired for their style. A major cause for early leadership failure is not fitting in with the existing culture. In fact, matching the wrong personality to an organization leads to almost certain failure. Experience can be altered, but personalities cannot. Great CEOs don’t come into an organization thinking they know more than the collective wisdoms of their new companies. They find their way into the culture, establish themselves and then charter a new course for the business.

6. Can They Think Young?

E-commerce and similar advances have altered the business world at lightning speed. These technological shifts have also widened the generational gap between 55-year old leaders and their 35-year old direct reports or, in many cases, their peers. Regardless of age, true leaders must possess a gift for bridging this gap.

7. Can They Exploit Trends to Their Advantage?

Years ago, it was okay to commit to a single strategy. A factory could produce –and sell— widgets for fifteen years. However, business leaders today must adapt and discard trends quickly to keep their businesses relevant. For instance, in the 1980s, Banana Republic embodied the “safari trend,” with a jeep in front of every store. In response, Les Wexner of Limited created a popular brand called Outback Red. When the trend died, so did the label. He didn’t have to rebuild 400 stores.

8. Where Have Their Former Employees Gone?

A strong mentor can both choose good people, and mold them into future leaders. Many leaders want soldiers, who simply execute their commands. The more effective leader hires people who create new ideas that propel them toward bigger jobs. Only a true leader can engender the success of his employees. By doing so, they create a stronger organization as a whole.

9. Can They Be Passionate Without Being Emotional?

No one wants to put up with emotional bosses, particularly those who get insulted and grow defensive each time an idea is challenged. It’s impossible to get much work done when executives must constantly manage their CEOs’ psyche. By contrast, passionate leaders care more about their business than their ego. They will listen to those around them.

10. Do They Have A Sense of Humor?

While no search committee wants to hire the class clown, a sense of humor can be an incredibly powerful tool for leaders. Humor disarms people –be it disgruntled employee, dissatisfied shareholder, or unyielding client— and forces them to consider another point of view. Leaders who can find something to smile about amid difficult situations instantly create a positive workplace. A sense of humor is one of the few qualities possessed by most U.S. Presidents –including Abraham Lincoln, George W. Bush, and Barack Obama. If Lincoln could find levity during the Civil War, shouldn’t a CEO do the same during a weak earnings period?

Les Berglass is the founder of Berglass + Associates, an executive search firm focused on consumer goods companies. Berglass+Associates has been responsible for placing the CEO of organizations, such as Bath & Body Works, DSW Inc., St. John’s, and Victoria’s Secret.

Citigroup’s Asia-Pacific CEO Ajay Banga will be leaving the company to become MasterCard’s president and COO at the end of August, reports The Wall Street Journal. Currently, MasterCard CEO Robert Selander also operates as president, but Banga will take over these duties.

Citi has not yet named Banga’s successor. In late 2007, Citigroup briefly considered him to succeed former CEO Charles Prince, but chose current CEO Vikram Pandit instead.

Banga’s exit is the latest of a handful of executive losses at the company, which federal officials have expressed concern about due to the lack of Citi’s commercial-banking experience under Pandit.

Banga spent 13 years with Nestle India and two years at PepsiCo before joining Citigroup in 1996.

McDonald will take over July 1, succeeding A.G. Lafley, who became CEO nine years ago. Lafley will remain chairman.

McDonald plans to focus on emerging markets in the developing world, building new plants in countries such as Pakistan and Nigeria. He believes the company can more than double its sales, to $175 billion a year over the next 15 years, by increasing its reach into countries like India, China, and Brazil.

“There’s no question that the basic demographics are going to take the center of gravity of our business to Asia, to Africa — where the people are, where the babies are being born,” McDonald said in an interview last year.

Procter & Gamble’s board of directors met yesterday amid reports that they are ready to act on a long-anticipated CEO succession plan, reports the Boston Herald.

“It is a very deliberate and well-planned process, years in the formation, and we’re not expecting to be making any announcements,” P&G spokesperson Paul Fox told the Associated Press before the regularly scheduled meeting at company headquarters in downtown Cincinnati.

COO Bob McDonald has been in the lead to succeed A.G. Lafley as CEO of the world’s largest consumer products maker. McDonald, a 29-year P&G veteran, has worked closely with Lafley, who became CEO nine years ago. McDonald worked in the Asian businesses sector that P&G has increasingly targeted for growth.

Citigroup officials are naturally recalcitrant in allowing the FDIC to replace Pandit and others, saying that FDIC chairman Sheila Bair does not have the authority to make such changes. “The FDIC is our tertiary regulator,” says Citigroup CFO Ned Kelly.

The Federal Reserve Bank and the Office of the Comptroller of the Currency also have control over the beleaguered bank.

Citigroup Chairman Richard Parsons claims that his bank is in stable condition, citing a balance sheet reduction of nearly 25 percent in recent months. “We have raised an unprecedented amount of capital, and, upon completion of the pending public exchange offer, Citi will be among the best-capitalized banks in the world,” said Parsons.

Citigroup officials are naturally recalcitrant in allowing the FDIC to replace Pandit and others, saying that FDIC chairman Sheila Bair does not have the authority to make such changes. “The FDIC is our tertiary regulator,” says Citigroup CFO Ned Kelly.

The Federal Reserve Bank and the Office of the Comptroller of the Currency also have control over the beleaguered bank.

Citigroup Chairman Richard Parsons claims that his bank is in stable condition, citing a balance sheet reduction of nearly 25 percent in recent months. “We have raised an unprecedented amount of capital, and, upon completion of the pending public exchange offer, Citi will be among the best-capitalized banks in the world,” said Parsons.

We recently sat in on a conversation between Magnus Böcker, president of Nasdaq OMX Group and Kevin Kelly, CEO of executive search and leadership advisory firm Heidrick & Struggles, which trades on Nasdaq. The two shared their views on what leading companies must do to persevere during times of uncertainty. They also discussed what trends are shaping today’s corporate leaders and boardroom agendas and their own organizations.

Kevin Kelly: Magnus, have you found your management style changing as a result of the global crisis? Internally, how have you dealt with your people, your budgets, and your customers?

Magnus Böcker: The traditional thing to do under these circumstances is to make sure you have the right cost discipline and see if there are things that you haven’t dealt with that you should. At Nasdaq OMX, we have a tradition of good cost-discipline and already run very lean operations. So that part has not changed . The lesson learned over the last eight months is that the business model of exchanges is very strong. It has functioned well, even amidst trading volume that is more than double that of a few years ago. We’ve been open every day, we’ve been trading and providing an avenue to capital for companies. At the same time, the credit markets have been dysfunctional.

One of the things we are doing is looking at ways we might be able to leverage this environment and see if there are new opportunities. We’re using the exchange model to see if we can add value to the market for interest rate-swaps and other instruments and markets that we probably never would have been able to go into unless we had this crisis. Kevin, tell me, how has it changed the way you see things?

K.K.: There are a couple things that we are doing differently. One would be communication. I think leaders in any organization try to communicate effectively, but we’ve definitely ramped up the communication. Number one, internally to all of our consultants and employees across the globe, we make sure they know that the operating team is doing everything possible to weather the storm. Because we’re in over 60 countries, we’re in touch frequently, so they don’t have to guess what’s going on. We convey what’s happening in real time—partly to steady nerves, partly to ensure our crew benefits from the great advantage we have over our clients— about best practices across all geographies and all sectors. Number two, we have a constant dialogue around the world about how to best manage the shortterm. The dialogue is between our regional leadership and the operating committee, and it covers costs, as you mentioned, and making sure that we preserve cash. As in any organization, cash is king right now, so it’s crucial we stay on top of our operations around the globe on a day-to-day basis. Another aspect of this would be short- versus long-term thinking. We all have two- to three-year plans that we have in effect or that we would like to execute, but the current economic situation has kind of thrown a spanner in our long-term thinking. It’s hard to forecast what’s going to happen to the market tomorrow, let alone three months from now.

M.B.: You highlighted something that I agree with completely. That is that our staff, our customers, and our partners are demanding more information. I think that’s a very relevant point, that when everybody sees all this information out there and much of it is negative, we need to be more proactive in the way we’re communicating. We are going out to listed companies in a way we didn’t before, telling them what’s going on, trying to use communication as a tool to tell them what we’re doing and that the world goes on.

Now Kevin, you talk to a lot of CEOs. What are they concerned about right now? How about the board?

K.K.: With all of this debate and dialogue, when we talk to potential CEOs for jobs, we hear concern about the scrutiny put on CEO compensation today. But it’s not only that. One CEO who could run a major financial institution said to me, “Kevin, forget the $500,000 comp, because it’s not about compensation. The reputation I’ve built up over time is worth much more than $500,000. The risk of taking on this job is too high.” Boards are of course very interested in the short-term. They’re also preoccupied about succession planning; not just for the CEO, but for one or two levels down in the organization. And they need to make sure the firm as a whole has the talent pool that’s going to enable it to succeed. We’ve had probably a six-or-seven- year run where the focus on quarterly results caused a lot of turnover at the CEO and board level. You can’t build a long-term, sustainable strategy when you’re flipping over CEOs and executive teams every 24 to 36 months. Everyone is still figuring out this recession, and how to work our way out as fast as possible. So it’s important that boards are really clear about the overall direction of the organization. It’s also crucial that they support their CEO and leadership team. Every CEO faces agonizing choices, like do they yield to short-term pressures and just cut costs? Or do they pursue innovative ideas so as to come out of the downturn ahead of their competitors? Away from the storm, the right answer is obvious, but taking the long view is easier said than done when the wave right in front of you is the biggest you’ve ever seen. Boards can do a lot to build the confidence of the organization’s leadership. Exposure to risk needs to be managed with extreme care right now. But most organizations will work their way out of this downturn by finding new ways to stay competitive. Apple increased its R&D spending during the dot-com crash and made the iPod. But that means a degree of risk-taking. Managing that is one of the most important tasks of leadership right now because innovation depends on the prevailing culture of the organization.

I see it with my own board. You have a group of very smart, free advisors, who are willing to help. Whereas I may have talked to a couple board members every three or four weeks before, in the last few months I’ve had more frequent dialogues. On a real-time basis, I’m getting their input on the decisions we’re making as an organization.

What has your experience been in this area?

M.B.: There’s no doubt that you see changes happening at the board level when we have these difficult economic periods. We see more engaged board members, and that is a positive. They want to know, what’s the top project? What are the key figures to follow? I would say that from talking to a lot of the companies that are listed with us, the general theme when you talk to CEOs and CFOs is that it’s back to basics—they are following cash flow very closely. The board is keen to know more about risk management. They want to know more about how are we doing with acquisitions and following up with previous investments.

K.K.: What is your view about having a separate CEO and Chairman?

“I have more frequent dialogues and I’m engaging [the board] in decisions that we’re making as an organization and getting more input on a realtime basis.”

—Kevin Kelly

M.B.: That is the structure that we have at Nasdaq OMX. I’m coming from a European tradition, where, as you know, there’s a very clear and distinct separation of the chairmanship and the CEO. So, I’m very supportive of it. We have been supportive of the philosophy of separating the CEO and the chairmanship for a very long time. We see that as good corporate governance, and we’ve taken a strong position on it.

K.K.: I’m in the same situation. I have a chairman who’s been extremely supportive of me. A lot of the dynamic in any organization hinges on who the chairman is. I spent the last three years in London, so I have seen up close how well this works there. We may see a trend in the United States towards dividing the two roles, just given the size and scale of some of the organizations today. Given the time it takes to actually manage these, I think it makes sense to split the chairman and CEO jobs.

M.B.: Kevin, is this a generational issue? Do you see this becoming less of an issue when younger executives are promoted to CEO who have less of a traditional background and are more operational, more performance-oriented?

K.K.: I think you’re right, because the average age of CEOs is coming down. One of the questions that goes to the future of the CEO is, given the global reach of most organizations today, and the time that it takes, the endurance and tenacity you need as a CEO, how can you be expected to run the board too? So I think it is a generational thing. In my personal experience, the chairman can also serve as advisor, guide, and coach along the way, and this is a trend that will continue.

M.B.: Is there a new CEO for this environment and what are the characteristics?

K.K.: What’s fascinating about this is that we will see an evolution of a whole new group of leaders across the globe, who differentiate themselves by succeeding through this financial crisis. There has been so much change over the last seven or eight years and everything moves at a much faster pace, even the communication tools and real-time technologies, as Nasdaq well knows. But it takes a long time to fully know the business. Jack Welch said that it takes five years before any CEO—even an internal candidate— can get a full grasp of their organization. So my belief is that the CEO of the future will be somebody who has the international component and background and can also understand different cultures— especially with bigger and more complex organizations. There is another component, too. CEOs can’t be dictatorial today; they have to be leaders who can bring people along. So I think not only does he or she need to have the IQ, but also the EQ, the emotional quotient, and then a third quality is the CQ, or the cultural quotient, to maneuver through different markets and cultures across the globe. I think those are the critical success factors going forward.

There is so much information out there that it can almost be overwhelming to the CEO of a large organization. Now at Nasdaq, which thrives on this technology and these information streams, I can image it would be difficult to keep from drowning in it.

M.B.: Maybe it’s because information is the lifeblood of the company that we don’t get too stressed about it. In the industry we’re in, there is a constant stream—I wouldn’t say overflow—but we have a very intense informational flow, and that is part of our world. Therefore, I think we get less caught up and less stressed about it. But it is getting more intense, especially with everything going on in Washington. We don’t only have ordinary business information, we have a new government coming in and, with all the things happening around that—the new players, the new issues—that is creating enormous amounts of information to digest. But our existing infrastructure helps us to see what’s relevant and what’s not. I think it’s a very important question, and we have addressed it. There will always be things that fall between the cracks, but we feel actually quite okay.

But Kevin, I’m curious, is there something about business leaders—let’s say the candidates that your firm recruits—is there something about business leaders that enables them to graze over this avalanche of information and make sense out of it, that perhaps lesser leaders don’t have? 3

K.K.: Well I recently had a discussion with a CEO who just retired, and I asked him how he was spending his time. He told me that it’s amazing how long it takes to actually read a magazine cover-to-cover or the newspaper cover-to-cover without getting distracted and, based on numerous conversations with CEOs, I think it comes down to discipline. Today we’re inundated with information. I mean you have Blackberries, you have your computer, you have mobile phones. The expectation is that if you don’t reply or respond to somebody in 30 or 40 seconds, no matter where they are across the globe, you’re not getting back to them in a timely fashion. So having interviewed a couple CEOs about how they manage their time and whether they expect CEOs to work even harder in the future, I don’t think that’s actually possible. You can’t think about what you want to do with the organization longer term and also let your Blackberry rule each day.

M.B.: I think we all know the feeling.

Magnus Böcker

Magnus Böcker understands that a successful business strategy can be likened to running a marathon—patience, endurance, and mental fortitude are needed for both. His success as a runner, having finished a New York City Marathon in less than four hours, has abetted his professional endeavors. As president of Nasdaq OMX Group, Böcker is well-equipped with experience in the European and international capital markets. While CEO of OMX from 2003 to 2008, Böcker oversaw the integration of seven national exchanges in northern Europe into one. Today, Nasdaq technology supports more than 70 exchanges. He is a member of the board of the World Federation of Exchanges (WFE) and also serves as chairman of the board of Dustin Group, a privately held electronics retailer in Sweden.

Kevin Kelly

In full swing working on his second book, Top Jobs—How They Are Different and What You Need to Succeed, Heidrick & Struggles CEO Kevin Kelly writes of his own experiences as he explores what it takes to lead a global organization in the 21st century. Fluent in Japanese, Kelly joined Heidrick & Struggles’ Tokyo office in 1993. He was regional managing partner of Asia Pacific and then Europe, the Middle East, and Africa before being named CEO in 2006. Kelly believes a new approach to leadership and talent is necessary to succeed in today’s tumultuous economy and he coaches today’s top corporate chiefs on just that.

Succession planning is hard in most organizations; in your case was it especially difficult?

When I was 49 years old, I had a heart attack. I realized at that point in time that there really wasn’t a member of the fourth generation of my family who was going to take over the business. We were going to have to take all this talk about succession planning very seriously. At Hasbro, we decided early on to split the roles of the CEO and chairman of the board. But at first when we were talking about succession planning, the one person that everyone else thought was “untouchable” was me. I went to the board and said, “I’m the one person who should be touchable” in the succession-planning process. I felt that we would never get great people to join Hasbro as executives if they couldn’t go for the brass ring.

We agreed on a two-step succession process. In the first stage, I would step down as CEO but remain chair, while the president of the company, Al Verrecchia, would become CEO. We would at the same time bring in someone to replace Al as president of Hasbro. The plan was that a few years later, Al would become chair, the new person would move into the CEO position, and I would move on to greener pastures. It pretty much played out that way.

What does the board look for in new directors?

We seek board members whose expertise is relevant to all the disciplines we deal with as a company. I think right now we have a good group of directors. I do believe in term and age limits for directors, and at Hasbro we do have an age limit of 72. Sometimes that’s good; sometimes that’s bad.

When we go out and look for a new board member, we really are doing it strategically. Before individuals become part of the Hasbro board, we want to understand them and have them understand us. We want to convey the culture—a family culture—at Hasbro. This is a culture where the belief is that the most important resource any company has, at all levels of the organization, is its human capital. The Hasbro culture also includes a commitment to giving back to the communities in which we operate, which are worldwide. If you do the right thing as a company, people will be there for you. Of course, once you go public, you’re no longer a “family business” in terms of corporate governance. However, you can still have sensitivity to a strong family ethic in the workplace, and Hasbro has that sensitivity.

Hasbro has operations in more than 20 countries and is expanding its investment in emerging markets. What has been the board’s input on global strategy?

The board has been very active in this area. We do about 30 percent of our business internationally, and we’d like to strive for at least 50 percent international business down the road. The board has encouraged Hasbro to move into the BRIC (Brazil, Russia, India and China) countries. The directors constantly want to know what we are doing to increase the percentage of our sales that come from outside the United States. This year, we have set up offices in China, Brazil, and Russia. In India, we are trying to invigorate our partnership.

Hasbro also has successfully grown through mergers and acquisitions. What is the role of the board in these activities?

The Hasbro board has been instrumental in working with management on assessing these situations. A good board member has to listen, but also has to know when to ask key questions. It’s very important that the board knows the moment there’s some meat on the bone, in terms of any possible offer or potential target.

When we turned down an acquisition offer from Mattel in 1996, I got a call from my mother, who is the largest shareholder of the company. She said she heard we were going to turn down about $600 million for the family. She wasn’t too happy. The economics of the Mattel deal were the kind you usually don’t say no to—but money is only one aspect of any offer. Another question was: Was it doable? Mattel and Hasbro were first and second in the toy market, which needless to say raises antitrust issues. Could Pepsi and Coke get married? We had three law firms look at the transaction from an antitrust perspective, and even with divesture, they believed that it would take at least a year, and that there was only a 10 percent chance of success. That is not a good risk/reward scenario. How do you attract good people to your business during a period like that? After lengthy discussions, we decided not to go forward with the acquisition. But for the most part we have had success in the M&A area. We bought Kenner Parker in 1991—that was truly a marriage made in heaven. We put together Monopoly and Clue with brands like Battleship and Candyland. When you buy something, the most important question is what you can do with it. Who would have thought, for example, that G.I. Joe could be a major studio movie?

The Hasbro board has been engaged in issues of corporate social responsibility and environmental sustainability in recent years. Are there lessons you have learned in these areas that you can share?

Corporate social responsibility can only be successful if the people involved mean what they say. Too often leaders mouth the words, but it is not in their heart. People can see through this. At Hasbro, we are so fortunate that our chairman, Al Verrecchia, has a passion to do what is right, and he, in turn, is collaborating with our CEO, Brian Goldner, in Hasbro’s social responsibility initiatives.

How do you ensure that the products are not being made in factories that have unsafe or exploitative conditions?

I am co-chair of an effort to set up one global code for toy manufacturers. We work with the nongovernmental organizations, and now we’re calling for a global standard for safety. In reality, we have taken brands, retailers, and manufacturers from around the world and we have agreed on a code and an implementation in order to ensure that workers are treated and paid properly and that toys are made in a safe environment. Also, we are now trying to create one safety code globally, since children— whether they be Sudanese, Indian, Chinese, or American—are all the same. There should be one code for one world.

We’re going through a difficult economic time. If there are fewer jobs, people will have more time to play, but will have fewer resources to pay. Is the toy and game business recession-proof?

No business is recession-proof. However, we do know that in difficult times, parents and grandparents have a tendency to skimp on themselves and try to take care of the children. Also, in times of recession, people tend to stay closer to family and home, and many times that means more board game playing and more time spent doing things together—that benefits us. People, even in difficult times, seek out innovation as long as it piques their imagination. Lastly, 80 percent of what we produce is sold for under $20. So, even though we are not recessionproof, we are in a much stronger position than most.

One last question: Do you have a favorite toy?

Many people ask me if I have a favorite toy. Having been in the business for about four decades, I now consider most of our toys like my children. How can you favor one toy over another? But I know that Mr. Potato Head will probably be upset with this answer.

This interview was conducted for NACD New England’s Executive Speaker Series by Patricia M. Flynn, professor of economics and management at Bentley University, and edited by Martha E. Mangelsdorf, a business writer and editor.

“I have yet to hear a credible argument from anyCEO on why it is better to have the same individualrunning the company and the board at the sametime,” says Pearce.

In addition to his two chairmanships, Pearce nowspends a significant portion of his time preaching toCorporate America that it is time to separate the jobsof the CEO and the chairman of the board. Last yearhe co-founded the Chairmen’s Forum, a group ofdirectors who meet to discuss the issues unique toindependent chairmen. Recently, the group issueda call to North American public companies to voluntarilyadopt independent chairmanship as thedefault model of board leadership, upon successionof a combined CEO and chairman. “The time isright for the growing number of those actually doingthe job to build knowledge on how independentboard leadership can best work,” he says.

In March, the group, in conjunction with theMillstein Center for Corporate Governance andPerformance at the Yale School of Management,issued a recommendation that boards appoint anon-executive chairman (on a comply or explain toshareholders basis). “The independent chair modelhas been adopted successfully by many companiesin many regions of the globe as a means to furtherensure and empower board independence,” says IraMillstein, senior associate dean for corporate governanceat the Yale School of Management.

The report has created a stir in governance circlesand garnered support from shareholder groups, corporategovernance experts, and a slew of prominentdirectors. Among the more than 60 signatories of theproposal are: Harvey Golub, the non-executivechairman of Campbell Soup and former CEO ofAmerican Express; Jay Brown, CEO of MBIA Inc.;William McCracken, chairman of CA Inc.; GaryWilson, former chairman of Northwest Airlines anda director at Yahoo; and Directorship’s chairman, JeffreyCunningham, who has served as non-executivechairman of Sapient and Bankrate. A number oflarge pension funds have also endorsed the endeavor,including the California Public Employees’ RetirementSystem (CalPERS) and the California StateTeachers Retirement System (CalSTRS).

“It is a full-time job in itself toensure you have best practicesand to manage the board, whichis a substantial responsibility intoday’s business world.”                                                                                                –Harry Pearce

“With a separate CEO and chairman, you end upgetting better management of the company becausethe CEO is not unduly influencing the board’s importantjob to assess the CEO and make a change if necessary,”says Wilson. “It should improve corporate performanceand lead to more competitive CEO compensation practices.”

On one point the Chairmen’s Forum is clear: it isnot looking for current CEO/chairmen to relinquishone of the titles precipitously. The proposal calls forthe board to separate the roles upon succession tothe next chief. “We are not looking to strip currentCEO/chairs of one of their roles, I think that wouldbe too disruptive and would not be productive,”explains Pearce.

Got Oversight?

Not long ago, the primaryrole of the board was largelyadvisory, he says. As variousscandals occurred in CorporateAmerica over thelast several decades, thatrole morphed to includemore monitoring and oversightfunctions. Legislation,new rules from stock exchanges, and decisionsfrom the Delaware courts underscored that transition,and boards turned more independent in their makeup.The pace of that evolution sped up after the fall ofcompanies like Enron, WorldCom, and Adelphia,and the recent financial crisis has made directorshyper-aware of their oversight duties. “Boards werereacting to the various crises and the concerns fromstockholders and the public of whether there was adequateoversight of management,” says Pearce.

In fact, the number of non-executive chairmenhas been increasing steadily. In 1998, 16 percent ofthe S&P 500 had a non-executive chairman (meaningsomeone who was not also the CEO). By 2008,that number had grown to 39 percent. However, thedata is somewhat misleading, since many non-executivechairs are former CEOs of the company oranother related party, and therefore may lack fullindependence. In 2004, the number of independentchairman was just 8 percent. But boards are increasinglyappointing a truly independent chair. In 2008,the figure climbed to 16 percent.

In Europe, split CEO and chairman roles are farmore common. German and Dutch regulatorsrequire it, and in the United Kingdom, 79 percent oflarge companies have an independent chairman.

The principal reasoning behind the push for anindependent chairman is to eliminate the conflict ofinterest that exists when the same person is leading aboard charged with overseeing the managementincluding the chief executive—in effect monitoringhimself. “I don’t fault CEOs. I think it is difficult toassess oneself. The primary duty of the modern boardof directors is to provide oversight of management,”says Pearce. “Realistically, to ask a chairman/CEO toprovide an objective critique of his own businessplans and his own strategiesis asking more of ahuman being than Ithink is possible.”

There is another,more pragmatic reason,Pearce says, that cleavingthe CEO and chairmanroles makes sense. Managingtoday’s large, globalcompanies is a massivelycomplex, challenging, and time-consuming job; splittingthe roles frees up the CEO to focus on the business.He also says the chairman’s job has become moretime-consuming and difficult, especially in light ofgreater compliance and reporting requirements. “It is afull-time job in itself to ensure you have best practicesand to manage the board, which is a substantialresponsibility in today’s business world,” says Pearce.

Another benefit is the dynamic change in the waythe board interacts. “To get the benefit of all theknowledge and skills that outside directors possessyou have to have leadership of the board that drawspeople out,” says Pearce. “The only way you get thatfrom a board is to have an independent chairmanwho wants to draw out each and every director, evenwhen some of those points of view are going to becritical of management.”

Wilson says the change can be immediate. “I havebeen in situations where an independent chairmanis appointed and it is instantaneous how the dynamicin the boardroom changes,” he says.

The Lead Director

Perhaps the main argument against separating thejobs is that in many cases where there is a CEO/chairman,there is also a lead director, who presides overexecutive sessions, provides leadership to independent directors and a check on management, andupholds high corporate governance standards. However,participants in the Chairmen’s Forum say thatwhile appointing a lead director has it merits, it is ahalf measure that often does not go far enough to solvethe conflict-of-interest problem.

“The difference is quite significant. I have served asa lead director and I have served as a non-executivechairman and there is a big difference. The person atthe head of the table leads the meeting. Other directorsdo not look to the lead director in the same waythey look to the chairman.”

Other members of the Forum agreed. “The leaddirector is better than nothing,” said one of the participantsat a recent Chairmen’s Forum gathering. “Buton a scale of 1 to 10, having a [non-executive] chairmanis a 10, and having a lead director is about a 4.”

Wilson, who also is a director at Yahoo, is less sanguineabout the benefits of a lead director. “I thinkit’s almost worse than not having one, because ittends to lull people to sleep with the appearance thatthe board has independent leadership.”

Pearce also dispels the argument that executivesessions without management can provide the typeof oversight required of the board. “You need someonewho the board looks to as their leader to initiatethe kind of frank, candid discussions that are needed.Otherwise, you end up with an executive sessionwhere no one quite knows what to say, and they endup being brief and unproductive.”

Another common argument is that companieswho are recruiting a new CEO will not be able toattract the best candidates if the job does not alsoinclude the chairman’s position. “It’s not necessarilytrue,” says Wilson. “We just did it at Yahoo. It is not abarrier to getting top candidates interested in the position,”he adds, referring to the appointment of CarolBartz to the CEO job in January, widely hailed as astrong selection. Roy Bostock is the non-executivechairman at Yahoo. “When we get separation of bothpositions, it will not be a problem because it takes itout as a competitive issue.”

Adding Some Teeth

The current proposal from the Chairmen’s Forumcalls for a voluntary adoption of the split structure,but the Forum may consider advocating for a rule ofsome kind, and is currently weighing options onjust how that would work. One of the options is forthe New York Stock Exchange and Nasdaq OMXto adopt the Forum’s recommendations as part oftheir corporate governance principles in their listingrequirements.

A second possibility is a rule from the Securitiesand Exchange Commission (SEC) that wouldrequire companies with a combined CEO andchairman to explain in the proxy statement the stepsthey are taking to handle the inherent conflicts ofinterest that arise. “It’s unlikely they would want toaddress that, and it would probably push more companiesto adopt the separate structure,” says Wilson.

Meanwhile, some shareholders are not waiting forcompanies to voluntarily split the post or for the SECor exchanges to adopt new rules. Proxy proposals toforce companies to appoint an independent chairmanare on the rise. As of May 1, there were 48 proposalsto require a non-executive chairman, up from31 at the same point last year. At Bank of America, aproposal to require an independent chairman passedby a slim margin, forcing CEO Ken Lewis to give upthe chairman’s title.

The Chairmen’s Forum has won the support ofsome large investors, including Norges Bank InvestmentManagement, Europe’s largest pension fund.“One of the most important roles the board has is tofire and supervise management. Therefore, theboard cannot be led by management itself,” saysAnne Kvam, global head of corporate governanceat NBIM.

Wilson says some institutional investor groupshave been hesitant to fully back the proposal, but hesays the tide may be turning. “They have not wantedto rock the boat in the past, but they are now in amood that they are more willing to rock the boat,”he notes. “Separating the roles of chairman andCEO is the critical missing piece in the evolutionarypath of boards representing owners better.”

Says Pearce: “When you have been there in theboardroom and you have experienced both models, itis just so obvious that the split roles make sense.”

Linda Cook, one of the most senior women in the global oil industry, is stepping down as an executive director of Royal Dutch Shell after losing the contest to become CEO, according to The Wall Street Journal.

Shell said she will resign Monday after working at the company for 29 years. A spokesperson confirmed that the decision was “by mutual agreement” and she will continue to advise the company on strategy and “ensure an orderly succession in gas and power.”

Cook was in the running to replace outgoing CEO Jeroen van der Veer, who is stepping down at the beginning of July. She and head of exploration and production, Malcolm Brinded, lost out to Peter Voser, the CFO.

Cook’s removal would allow an overhaul to Shell’s corporate structure, with the exploration-and-production division possibly being merged with gas-and-power.

“It’s not unusual for a new CEO to want to revamp the structure,” said Peter Hutton, an oil analyst at NCB Stockbrokers to WSJ. He said it would also be a way of compensating Brinded for losing out in the leadership contest, since he would be presiding over a much larger division with far greater responsibilities. It might also lead to a more effective allocation of resources within Shell, Hutton said.

The appointment of Schlosstein to the CEO role is viewed as a step towards expanding the firm’s asset-management unit, become more diversified, and thus, less effected by deal cycles, the WSJ reports. The veteran asset manager worked at Lehman Brothers with Altman until 1988.

]]> http://www.directorship.com/evercore-ceo-altman-to-step-down/feed/ 0 http://www.directorship.com/aig-to-seek-liddy-successors/ http://www.directorship.com/aig-to-seek-liddy-successors/#comments Thu, 01 Jan 1970 00:00:00 +0000 News Editor http://www.directorship.com/?p=3471 American International Group (AIG) said Chief Executive and Chairman Edward Liddy would step down as soon as a successor is found to take over running the bailed out insurer. According to CNN Money, Liddy has recommended to the board that they also seek a second candidate for the chairman role, splitting the two roles, AIG said in a statement.

The board is to launch its search immediately. Liddy will remain on the job until the search is concluded, the company said. He was appointed CEO at AIG in September within hours of the government stepping in to bail out the company following his retirement from Allstate insurance company.

Mulcahy, 56, will remain chairman, the company said in a statement yesterday. She started at Xerox more than 30 years ago and took over the top spot in 2001, charged with reversing repeated quarters of sales declines. Shannon Cross, an analyst at Cross Research told The New York Times, “They effectively had a two-year transition.”

Tollett had previously said the CEO search could take three months to three years. Tollett has been serving as the interim CEO since early January, when Richard Bond resigned and left the company.

Morgan Stanley has begun the search for a new CEO to replace current leader John J. Mack, who will be turning 65 this year, according to The New York Times.

Although the bank has not publicly discussed Mack’s successor, speculation has been raised that James Gorman, who is in charge of Morgan Stanley’s asset management business and its brokerage section, is one of the front-runners for the position. Other Morgan Stanley executives, including Gorman’s co-president Walid Chammah, CFO Colm Kelleher, and investment bank head Paul Taubman are also on the list of possible candidates.

Some speculation has also been raised about external candidates, such as Bob Steel who most recently headed Wachovia before selling it to Wells Fargo. Previously, he worked at the Treasury Department and at Goldman Sachs.

As a business with two distinct directions, a wholesale bank with a retail operation, Mack’s replacement must have the ability to balance both sectors. After Morgan Stanley takes control of Citigroup’s Smith Barney, possibly this summer, the brokerage arm will likely be more important and therefore make Gorman a stronger candidate.

Morgan Stanley’s banking operation reported $16.6 billion in revenue in 2009, which is double the global wealth and asset management divisions’ combined top line. In October, the firm converted to a bank holding company.

Regal Entertainment Group’s founder Mike Campbell is stepping down from his position as CEO, but will continue as executive chairman, according to Reuters.

Regal, the country’s largest movie theater company, announced Wednesday that CFO Amy Miles will replace Campbell as CEO, and Senior Vice President of Finance David Ownby will become CFO on June 30.

Campbell, who founded the company in 1989, said in a statement he looks forward to his new role “focusing full time on the strategic opportunities for Regal” while Miles and Regal President and Chief Operating Officer Greg Dunn concentrate on the company’s daily operations.

The octogenarian media mogul also said he has no plans to step down anytime soon or give up his controlling positions in CBS or Viacom.

“The one thing I would never do is lose control of CBS and Viacom,” he said, adding, “I have no intention of retiring or dying. I could live and work forever.”

The U.S. economy shrank by a surprisingly steep 6.1 percent in the first quarter, hit by a record plunge in the business inventories and exports, but various investors also read signs of recovery in the report.

“I think we’re in the beginning of a bull market. When a bull market begins, nine months later the economy turns around,” Redstone said during an annual conference hosted by the Milken Institute. With “the vital statistics of 20 year old,” Redstone attributed his robust health to antioxidants, exercise, and a daily shot of vodka.