I everyone welcome to reporters' roundtable I'm -- needle in the San Francisco this is our weekly show we talk about single tech topic each time it today.
That topic is one -- been in his life it is the succession of tech company CEO's.
Now the new took from last week was that Apple CEO Steve Jobs that he will be stepping down for health reasons leaving the operation of a company with Tim Cook.
The news -- from this week is that CEO of Google Eric Schmidt is moving into an evangelist role heading CEO title.
Over to co-founder Larry Page.
Reading with the CEO he leave moves the he -- of the heel moves in succession is like reading a good sport story with that other great tales -- history of tech.
Bill Gates left Microsoft whose polar opposite Steve Ballmer.
The charismatic Carly Fiorina got bounced out of HP to be replaced by the discipline Mark Hurd --
Of course we all know recently about that himself how much of a tech company -- in the -- what can a company do to ensure that -- maintains that working strategy.
And productivity when -- CEO -- and -- stranger over for a new one today we're going to talk about that issue we're gonna talk about CEO succession.
With two great guests first on the phone.
Joining us -- Beverly -- import advisor LLC.
-- that is -- -- fixer.
She has worked with more than a hundred CEO.
With a hundred boards of directors in the past decade on issues including CEO succession planning board engagement.
Warden director valuation and other topics she's the author of great companies deserve great sports which is -- will be out in June and -- the business week -- which I highly recommend called the board room welcome.
-- and also joining us via phone is professor Charles -- the director of the John L Weinberg Center for Corporate Governance at the University of Delaware charles' former law professor writer for both corporate and popular media and frequently quoted in publications like -- -- journal Bloomberg and the -- -- post.
And he's a board member himself that the health -- company help them.
Now let's start with what -- didn't think was gonna be a top story today but became one yesterday Google CEO Eric Schmidt announced he's stepping down CEO or.
Let's say as he says stepping up into the executive chairman position a doubly -- the title.
Google co-founder Larry Page will become CEO by the way.
I met Larry Page before Eric Schmidt was on board a global and a -- his business card from back in the old days effect upon -- -- the other day.
What does that get me I've -- itself and pumping -- -- anyway. So what is going on with.
With Google one of the things I think Schmidt said is that Google no longer requires adult supervision which.
Is both terrifying and this whole thing at the same time what's happening over a Google.
I actually liked but I like quick what's been going on it is only in terms of what they've got a succession here in it and number of different things and if you go back to -- -- -- -- --
-- Schmidt became the CEO.
You know Larry and instigate -- -- 2627. Years old very young -- to -- running -- company Eric was young and -- 44 but much more experienced he had been the CE LA Novell.
He had been the CTO over its --
And I I think it was a good needed to bring in somebody who has more experience.
-- -- -- but -- so it's been ten years clearly that's been an opportunity for EDT got to be developed. You don't by Eric.
And died at the company's doing --
What I really applaud the port port this -- is dot.
You know rather than it is in many key decisions -- -- -- -- like to say okay let's take.
You know Larry and Sergey currency ESI actually give them credit for achieving Larry as the CEO I don't like -- CEO situations.
And it really divided the world from what I can see between the executive chairman route to ride to -- --
-- CEO role to Larry and in the other world that they're giving to print so I I give them credit -- I think it's that I think -- interesting model when you've got a company with brilliant young founders who have very limited does this experience.
-- a look upon it a little bit differently. I mean the consistent typically traditionally support itself decides.
The -- currency and how long CEO last.
In the -- circumstance of Google it's a different story school has sesame called a dual class stock structure where.
The two basic two class stock --
It -- and the creation must come into one class and your economic interests and your voting it should decide to do less not the case that two.
-- -- the company has basically complete control the company to the two class structure there are a number of public shareholders obviously.
-- -- --
Power of the public shareholders is significantly diminished -- indeed in -- stock they out.
-- -- -- -- -- --
And control the company so effectively you know whatever happens there he is really the decision. The of the two founders.
And from -- accountability standpoint that's real problem because. Utility -- the question is does the what what controlled support -- we have to.
Shareholders with that much control -- this dual class structure.
Here's a must support really does -- doesn't. Can't -- because these standards the company they control holders.
Have the complete ability replace the board as well.
So any decision that's made religion -- -- since and some decisions up to two Anderson so the moving out of one's person in the elevation of one of the founders and the CEO role. It.
I'm not sure -- development.
Given that structure and from shareholders did what I think it's a real problem because you don't have occasional -- -- -- are unhappy with this is much that can do.
Now of course.
When Google originally went public one of the things that the founders said Larry and -- that was were not gonna be your typical company we're you're give us your money -- -- take it but we're gonna run this business the way we see fit if you're investing in the company.
You're investing enough in our vision of don't be evil it's that are our vision.
And the stock has not done badly you have to say.
Is is this kind of non this kind of royalty we discuss this last week we're talking about those -- -- FaceBook.
Is this kind of royalty structure at a big public company.
It. Is this something that can work going forward as company gets bigger and bigger.
Only if you believe that the -- superhuman and -- the ability to.
How to make the right decision and every step of the light now and and and is it is basically flawless and catchment because that's really what's happening boards and.
You know the -- conditionally -- accountability mechanisms for C notes and -- don't have that here and -- -- and -- cents.
-- in the case of global where Schmidt has moved out of the operational role at CEO role.
There it is talk that one of the reasons he did this is because of issues that Google is that with privacy with -- with the -- Google has dealt with China.
Do you think it planned to move -- succession now of that one of the co founders is. From a business perspective mature enough to run Google as a public company.
Or is this.
It was time for Schmidt to leave because he's put his foot in his mouth one too many times.
This doesn't look to me like that because they're keeping it on as chairman in their keeping him on its executive chairman they're actually -- to role for him.
That way as an ongoing.
The world which -- -- in talks you know that he's gonna continue to be involved in strategy he's gonna continue to be involved.
-- as you know external relations and things like that there is the real job as executive chairman seem bill flicking your has that job at Ford.
I'd -- to -- it has at the New York turned to --
Bet that if they real job I think if you wanted to get rich Smit.
-- traditional thing which is it ill -- -- chairman that basically I'm on dining the year and it doesn't know what's going on.
Okay any other thoughts on Google and how they managed to plan this and it.
I mean there were rumors of this a year ago but but this was not something that a lot of people were expecting to happen to -- this week.
The -- thing about it is its shareholders for some -- say I don't think it's good decision.
That in fact eclipsed it in and I'm not saying they should or shouldn't have happened if in -- they do it again it and most public companies.
They can express their concerns through their vote.
This is a company where -- really cute and I think that that's a real that's a real issue going to -- I think that.
And that -- -- other public companies to follow that model.
I think create real potential problems ultimately for investors. That is.
I I agree with the with the point that you make it that capability that I can tell me you got that but the same time I actually think this is this looks like they didn't need to me.
And I I give them credit.
Port making it needed to giving them if they lately they are quickly -- in 2000 world.
For accusing one of the key guys instead of both within.
You know I admit it's say yeah I agree that it's -- the flight system if you don't like the decision it looks to me like a good decision to only criticism I actually have -- -- Google think.
It's something I think it's really a very interesting it's going on over -- faith that.
It's with Sheryl Sandberg and you know he's he's been a particularly if -- they've got her -- -- the -- of Disney on the -- at Starbucks.
And I think it's just wonderful experience -- -- to -- getting it's giving her.
You know little knowledge of the board -- from big companies it's really brightening currently executive.
I'm the one criticism I would have a cook up New York City itself -- board of Apple.
You know they can be -- -- sit at a that the board table I'm I think it would take its -- -- doubt Larry Page.
They haven't -- some other ports yet it.
Now this could just talk about FaceBook for a bit here because we talk about that last -- commercial bout that private stock shares.
Mark Zuckerberg will be one of the youngest -- in of a public company in history if if and -- the FaceBook with public which we think it will.
He will be the youngest by the way that was Michael Dell we'll get to him in a minute. Now.
What you're saying here is that Sheryl Sandberg who has a history in in in public companies.
Is going is getting experience right now that you would want a up and coming CEO to have sitting and other ports what is Zuckerberg he is he is the air -- he is going to be CEO of a big public -- a multi billion dollar company.
What should he be doing to prepare himself to be a public company CEO as opposed to private companies.
Penguin I think he should be doing exactly what I that did it that issue is he -- wreck that -- got to be one of the hottest properties in America certainly.
I -- I'd -- -- -- companies earlier this year with their boards -- in the retail sector when it is that's stop state consumer gadgets.
On their target markets are young dairy -- -- people agency that 8018 to thirty what they want an -- are.
Peta people who really understand the digital media today and get that kind of that's.
You know what people would love -- Samberg Mark Zuckerberg the issue it has.
Really you can only be on one other border -- -- -- frontier and I I think that's even debt.
But if -- can achieve that we're very carefully he even wants to do it it may not even interest camp.
But I'm I think that it's typically a good experience.
For somebody -- hacker during any sector if you're aren't -- to become CEO of a large public company.
It can be very useful experience at some point your career to set.
On the other side of the -- table of another company and what you -- CEO work with the board.
Understand what it's like to be a director. If it's a very very valuable professional development experience where would you -- Zuckerberg. I would have to think about that.
I certainly think that he would want to going to -- with some pretty experienced. And directors where he can he can watch.
Did talented board members an accident in what it takes to end in watch that right from that table in a -- idea.
-- It's gotta be careful about conflicts of interest obviously in terms they think he cheapest.
I know he's there would be a lot of companies that would want him home but probably something with a young consumer base would make a lot of sense to me.
Charles what -- think about that transition a FaceBook.
From a I don't think it slightly different -- -- that you know they were saying at Seattle who wants commented that that they -- some as the number reported so well I I don't not my hobbies and -- I don't like off quite obvious that sitting imports have thought that comment was a little insulting to -- so that.
The -- the -- you have hobby.
And I don't think aborted something that someone uses to gain professional experience for their company any ideas of directors years Ayers a representative of the shareholder. Iconic think.
I went to congress because I wanted to experience -- public service --
UP you do it because you're you your 0% -- Christian --
You're -- yourself.
And you are -- Stuart Indian that your own investment in the investment analyst.
And I think the days in which people -- on board has not.
Oh look at a stroke easy if you will probably -- -- for the company that it gates and hopefully it and kind of move beyond that because that they could broke the director.
Is not to be advisor take -- Portland -- to a company but to really do the hard job.
Of monitoring management for the benefit of the shareholders if necessary. Making managerial change which for directors has really brought things to do it does not pleasant.
Not on -- -- -- get worried that people.
We do this you know for the experience with -- you know -- IBM liked it -- professionally develop myself for other things.
I think that its stock has been to make Vista decisions like -- has outlined in a report.
Charles have you been through.
A CEO changer direct actions like I've been dragged into a couple -- what happens what happened -- how does it how does it.
What's the Genesis of okay we've got a fire are bought from -- how does that work.
It effectively aboard its concerns about piracy has fully take camping --
In exchange problems and make the -- -- highly structured organization obviously it's highly destructive -- but.
Yesterday after a person on the -- -- interim until. The consulate -- replacement.
And in the meantime there's a lot of stuff because on intimacy yet it's removed.
Like lifting up a rock called the -- from -- by the community and its.
Not an easy to get it but it's a necessary to ask it in leadership changes are important but that he -- -- -- -- and that's why.
It's always important I think for directors have a lot of equity company and sports patients -- -- -- -- and thank.
And that they you know that they are they that there are that there -- that there responsibility shareholder value ultimately.
Tactic that sometimes we keep this particular company or companies -- again with.
-- stock structure -- harder to you know is it -- to have this direct relationship to the investor.
I think it's really critical to do really well -- ports and succession issues and managerial monitoring -- --
Just overall corporate success I'd much rather -- and that's the company because he think they've got a good idea and you like -- -- I think secondary to that -- an important.
Is is are the accountability mechanism built and enough to protect you if they -- idea you'd think doesn't -- recently could --
Now FaceBook I believe has a similar stock structure to Google where Zuckerberg -- his. -- -- -- of its software.
Middle classes since you are stupid that -- and and I think that.
That's you know I think as an investor that's that's concerning and it can -- that you're seeing a lot of this.
In -- certain new -- companies in which companies and that's that's concerning because the old company has that's its source structure as long time and loved it and addict not favor with investors and security can ability governance world developed at.
I'm sorry that that news organizations that have such great ideas and it's great talent. Go down that road think that ultimately.
Probably isn't -- -- building mechanism I think problematic as organizations at some point you teach yourself in trouble and he needs to be changed a great idea got itself in trouble.
Because of today. A lack of a real strong oversight and --
Now one of the things that we we we mentioned briefly Michael Dell here Michael Dell became the youngest CTO I think in -- -- -- with his twenties. And he was the -- public company we don't public and then. In 2007 heat turned the CEO job over to CEO Kevin Rollins.
That did not go very well and Dell returned as CEO where he still is still -- how does it happen that a a board of directors or CEO -- feel like -- or potentially Zuckerberg --
Something like that.
Will give their hand over the reigns of his company to somebody else who will then blow it how can that possibly happen with the functioning board.
Happens unfortunately -- more often aren't.
-- cloud as people who sit on the boards of directors.
To know 22 to -- these up and comers instant the CO -- that'd be dropped -- cl O and company happening fail in the EO job.
Note the yet they're deployed there really struggling -- have been struggling for quite some time when these kids see a succession planning.
You know historically it was CEO who can control the board today I would say this is my successor and -- is of the decade ago.
And platelet you know by the principally around the golf.
Maybe you'll facetious but that was how it worked.
Simply how life changed in the boardroom in the last decade we -- with get much more engaged and they realized its succession as the single most important decisions that they make.
But they also. -- themselves will admit that they're not doing a very good job and feel succession planning lot of case Laporte they're really finding their way Iraq.
You know if you look at the same most of the studies have come out the last decade from the national association corporate director.
They ask director of south 600 directed -- public company helped Activision boards in the area C a succession planning -- -- I thought this was in 2009.
They -- too close to 30% to -- it was not effective and that they --
So that's a really important area -- the -- of concern to show.
-- -- --
It tended to be kind of superficially -- when you think about it.
The better it looks. Six countries through a fairly narrow window -- -- -- got -- meeting scuttled out support meetings may be an off site.
That kind of thing.
It's really three lenses if you need to -- to get some really more constructive sense -- approach simply put them in that job.
No one is one of the field think that the person and they work with them day in and day out beyond the beyond --
No need to define what -- really the criteria that you worked and how does not match up with a strategy of the company in the business model of the company.
And then you know take a hard look at these people compared to those criteria you know because very many bullets don't.
So there will come across -- -- polishing a -- of don't touch the -- -- the -- -- -- make the person the young where they have a comfort level with some innovative fourth get very comfortable.
Whipped chief financial officer to General Counsel because -- -- -- the board meetings.
And yet -- -- literally an operating unit in -- life.
But I -- get into. There are a succession in particular its.
-- succession it's tough to begin without a succession which that you get ready tech companies is probably the most difficult to attract a succession to do.
And very often you get a real contrast between the visionary founder and yelled someone who feel good operating -- but it --
Kept -- and in you'll not only deployed that the organization becomes disenchanted.
The present just doesn't isn't able to -- -- the current deployments that was there and so -- -- things like Dell you see things like what happened at Starbucks.
It's not uncommon in Turkish -- offered detailed --
Now really and ended HP of course similar thing where they seem to have had a CEO strategy in some disarray with earth Fiorina.
Then heard -- like that kind of to everybody by surprise there kind of stuck there weren't paying with with her because what happened Fiorina.
-- let's put into thinking about about creative you know being -- and Oracle a neat guy he got Larry opportunity there he -- by the and militia with they had that they have a succession plan now if.
They didn't before I guess what else and being a kind of -- jobs Ian figure arrogant founder. Very. Visionary obviously built Oracle.
And who could step into that -- and now they --
But at that sit there and that's why cycle packed with one of the strong port and the role Laporte can pick someone make a mistake -- key -- -- -- board acted announced.
Strong and monitor -- that person doesn't work truck replacement bring some announcement and ethnic that the key and not leave someone.
In a position to lock and insist that this that the community charismatic -- -- -- --
Realize that they are put moral and at some point they're gonna have to move on do something else and that's. Another and other.
Succession plan to support and this goes back to accountability and oversight don't think it's -- so critical.
That -- you have an independent. Strong equity holding board.
A person in the interest -- not -- investors that ultimately it's it's -- yet but a succession of works and ultimately company works.
In chocolate really agree with having its current went under pushed back about the -- deals.
-- people going -- deported so that they can be less effective directors because one of their objective is also to get the extent to thing on the decided it was tabled I think that.
And -- people hey -- talking about -- -- tickets being anybody's trophy I think this is important for him to do I want you to have the experience of having to mix and does her decision to deploy cable.
I think that would really help you professionally.
And I haven't had been a concern about what's going on out there right -- with.
You know it is good --
I agree about the accountability. But -- seems to be sent until everybody's gonna be retired to be imported these days if you're an active executive.
I'm sitting on another board may not be a good idea I think active executives. Bring a lot to the board table and --
I don't together that is the question is today at the time to vote it probably an active expected today -- -- -- -- being paid money million dollars on someone -- company.
-- terrorist take can't figure that at least 250 maybe 300 hours a year and that someone.
This in that position physically have the time to do it in an an -- -- they are in fact taking 300 hours away from their own piece of their day job if you will.
If someone getting -- work trip here is actually is a wonderful -- question is do they have attacked and do it.
That's why retired folks -- recent retired folks are pretty good actually because they now have the time.
-- -- immediately if you have a choice of an active -- to detect question is do they have the active engagement.
But they really need these indeed want to motivate -- on -- you know certainly you know people -- -- -- reasons but at the stated reason.
Become -- -- professional development certificates hard.
The question is can you be a good monitor and that someone who's seeking professional direct them -- -- if you will.
Will they in fact be that best represented of those who elect them.
Do they have other motives in mind that affect their ability to make really taught courses.
If you're kind of an up and comer do you -- -- reputation as an up and -- someone.
Let's say to terminate its -- and in particular he notices a terminator -- did not help bring social element but for the shareholders it is import.
That's why it's not.
And that -- -- -- really changed over the last couple years ethnic traditionally you're various it is someone -- it'll walk.
I don't know what kind director mr. Zuckerberg would -- would night.
I think -- anyone who created a wonderful business and has great energy and talent and skill to make it a -- director.
I just get kind -- and in Portland now Portland folks that think look at sports --
Has beyond the C key role in interpreting investors think it throws something into the mix that.
May not be helpful although at least you know promote. Cigars.
Now we have to talk about Apple.
It is Steve Jobs again is saying he's gonna take some time off step away from the data operation if we believe that maintain an executive role there.
Handing over the data they operations at CEO -- to Tim Cook.
Let's stipulate that jobs is in the engine of Apple's success the parties the visionary whose company he is very charismatic driven leader.
How much can Apple do with another CEO can anybody. Succeed. Jobs.
You're gonna hacked into orbit at companies are designed around one person -- -- yes it actually but Charles -- we're talking the tech industry here my friend who aren't they.
Well let it out -- that is again that dictate Peter you're putting a lot of stock -- -- mortal being and and a lot of stock of someone he's we think is infallible you've got to have.
And inability of some succeed no one is I wish we were all -- but no really that's.
We -- again would be -- we work but we're not and I think you have to do that -- to -- scientists -- otherwise why advanced tab you know.
Wouldn't -- that person may decide to do nothing else get -- sick or let's say not the don't know who lose their tax if you.
I know I.
I think they -- I had an Apple actually that great speed computation data on child and I would just touting.
About you know -- C has to import -- fan.
And -- the or an active senior executives sitting on one idea board I think.
You know most. CEOs and other executives said I've worked with that had to experience such candidate in valuable -- them professionally but I can't continued adding Andrea young -- Apple.
Into -- -- is if you've got you tropical need to point.
That you want a strong port unsuccessfully and Apple's succession is probably gonna be the most watched succession since Jack -- --
What I like -- data entry is that she's on the bit with on the cheap port at the time the date.
-- route succession initiative front row seat to that which I think prepares her way out what I don't like.
Is that red Apple you've got co lead director -- the theory -- usual usually there's one person providing leadership and state trying to help bifurcated leadership on the board.
I'm so I don't like about it I don't like. You know pretty all the reasons that Charles just that the one of those sleek -- -- director that the entry young.
Tissue to running a current -- is the you know the company -- not -- of the board of General Electric and she's -- co lead director of Apple.
-- to need up to bridge too far.
And done you don't so I have a real concern.
About you know the -- succession being quarterback like somebody who I don't think really can get this year -- that the standard -- this particular issue.
I have either a public -- being on -- built a life I think personally I would say.
-- shareholder act -- it -- that the company's delicacy Andrea you know running one company and being one of those others -- she'd been achieved thirteen years.
If I were her and I had to -- that probably.
You know get off TE and and stick with.
Stick with Apple in in -- but even as lead director. Do it through a succession when you're the CEO of another alleged public appeal like it or I think that can be produced -- --
-- -- -- -- --
The Apple board -- itself -- a couple of controversy stock options back dating.
And obviously to disclose her -- this time and and and earlier -- regarding mr. chops and to begin able to keep kids.
You know shareholders -- can't get it to give shareholders -- public.
Now let's talk about that for a second day this is a little bit off topic but we are government jobs and boards and CBOs.
Jobs has asked made a plea to employees and to the public for privacy regarding his medical status given his position is that a reasonable request.
Rocketboom -- need to see how --
Nobody take public capital ease with which you -- it and it in the -- the party -- -- -- Apple gives you money.
Exchange you have -- -- you lose a bit if your expectation of privacy.
As to seal a major public company public in a term public. I think -- expectation of privacy is -- -- to lie like -- public and.
Why are people spending a commitment to demanding -- to shareholders thing you know what they mean when.
Try to stock prices moved all over look it -- with its --
But the it -- there doesn't he do -- much disclosures that they patient they don't I think you know again the expected expectation of privacy is different.
And then let's say a rank and file employee or replace -- to private company.
You know who doesn't have a public shareholders.
Jupiter which -- on the FaceBook or similar --
NRA. Moving and Microsoft.
Now Microsoft one of the most -- thing to me one of most interest thinks that he cases right now of course we get another. Visionary.
Founder CTO different case then jobs and they're very different people jobs and gates.
And the gates left to become chief software architect he handed the reins over CEO reins over to Steve Ballmer who was.
They were keen to partner team I mean you know the brain and -- pretty much you know the visionary tech guy and the sales muscle.
And sales muscle took over. Very different type of company what happens to Microsoft going forward can bomber continue to run it or.
Can't do they had can there be succession plan they seem to be losing their he -- right left the what's going on over Microsoft.
But they definitely releasing any day it's just it's just an accident -- it's a -- -- a nearly died -- -- publicly he slept Brad --
And Johnny can -- got to go to --
Nancy is ski he's left their the F have Chris let our laughed at the end of two actually and Ray Ozzie -- a lot.
Any dispute Butler is -- holding his power.
And if you can keep saying -- here how they get -- succession because I like you know what the original act lineup that it -- and --
Its -- -- where it about Michael -- and -- -- so he handed over their brains students say about their people and then eventually came about.
-- -- that does something really and usually they ticket CEO and enter a Bill -- state let -- be the chief software architect.
For a period of over five years from that he -- left the company that remained on -- chairman.
And guess what -- seems to have taken.
But now yield data that we've been out of the company -- you know about two years just a little bit more and armed they've got their talent.
Just X sitting in in drought.
And does so you have to say what Ballmer has not it's not being able to keep these people and you'll about the future of of the company so.
I would be very concerned and I I think we're really concerned.
And child you know I I don't have been treated at our data with the with some -- pointed out.
They're deciding how to find out what's really going on here that it's I was sitting on the Microsoft -- that they are.
I'd really be concerned about this -- of it's probably been the company and I -- really find out with --
How do you incentivize good people like these -- these directors of the company uses super VPs.
To stay on only been at the company for 1012 years they're fully vested they're they're -- a hundred millionaires. Try to get people like that to stay.
When money it how he.
Outlook a look -- isn't about any any more readily -- it doesn't get as many never work against a direct to their lives.
I'm indifferent I think some of the magic has apparently situations is that there a lot of people -- companies because.
They -- the -- it's running and paid by into the --
They feel like they're part of something bigger than 1000 and they are reluctant there -- -- -- -- by the fighting there.
And I think this is this is for the challenges would be -- -- standard situation because.
Standards bring that kind energy to organizations -- not the time and energy to its power.
And market that which he got Carter in my capacity in -- from what I can see it.
I -- are gonna run at a time.
Here pretty quickly I published in question from a community private chat with that.
How do you know there's a conflict of interest and appointing Eric Schmidt on the Apple board of course and we've talked about this a little bit here and there in this in the last half hour.
About conflicts of interest but in order for something like Zuckerberg to do a good job on another -- and to learn the most about running a public company -- get the experience.
-- -- you're gonna put him on the board of I don't HealthSouth that something you're you're don't want put in the board of something that is related somehow to what he does.
But then you have the issue of a conflict.
What one of the parameters of related businesses reverses the conflict business that you look for in it in in -- and import holders.
-- loyalty -- the -- organizations appear.
On the board of another organizational work for other cities to can teachers within the realm of competition -- -- organization seeking to.
Pure and simple -- you have legal department that.
Force you to be loyal -- and legally can accent and that means that someone -- cynical words -- competitor it's gonna happen or potential competitor potentially attention will not clueless sports but there are obvious recent.
But -- but in technology and as I believe in most other businesses you have what has been called coop petition I mean it's an integrated industry Apple FaceBook Google Microsoft.
At the Oracle at some point they'll end up working together as well as competing so where do you draw the lines.
You can't circuit competing ministers.
I think that's the issue and that's why you have to you have to be very careful that this again if -- serving two groups -- groups of dancers who are both competing with each other.
Give divided loyalties you're not doing anyone it.
-- -- it yourself. Being included.
-- thousand issue when you have any active CEO any other active X they -- -- they really have to go outside their industry untreated to keep.
From the conflict of issues of interest being an issue for them.
And and that can be can be difficult even if you go outside your industry you -- locator beacon don't support of something that's a major customer.
Of your company or major supplier -- you wanna get yourself far enough away from that and the marketing example.
I. To know -- there was talking to you telecommute.
With that theory is in a very senior role at a large packaged goods company in Europe.
And -- very much wants to consider the board.
And I think -- brought to bring he has tremendous and they experienced tremendous global.
Experience he's -- -- that's cited industry in his case he had a passion for electronics and it has nothing to do with the industry that he isn't so they'll that the current opportunities -- export.
Then that's great -- with obvious.
-- you know I mean.
But they are hobbyists students --
You know like -- I like to bring to the board and he's gonna go into an industry where he's got a passion -- that indicate going to zoning district.
Now let's wrap up chairman -- -- guys to -- pick what you think are the best and clearest CEO succession plans intact and and possibly the worst if you can either you wanna take that first.
-- -- -- -- --
I have attended specific company I think the idea is that it it it should be seamless.
Other words something happens someone who make an emergency basis among them and quickly in an -- it functions effectively.
Someone who's done great -- -- natural succession retired to something else and the idea is introducing. Them I -- --
I really don't wanna cut in a particularly -- to pretty recent percent of is that unless you actually work with the board's.
So they can look great on paper doesn't and then you look behind the scenes like -- it'll look great on paper in some respects it was -- -- the top.
You'll find boards in America back in 2000 I feel -- --
-- operated externally -- -- it's really hard to judge anything from the outside.
In that way but the way I think it is really interesting and package it got a lot of standard situations young offenders.
And to encourage -- not to go with a -- text brought.
Approach. -- theaters.
It does similar things you know little feeling like it's not a succession -- can be successfully not given what's going on with the exodus doesn't look so good.
But -- they don't really innovative thing in terms you know keeping gates around. Chief software architect I think what we're together -- which --
Equal risk with this -- -- that he they didn't. Unibody was someone out while he -- these two guys.
I'm looking look at where we show off their brick and elected to recover -- -- I get my point is when you're dealing with standard with a unique situation and I link which points to be innovative around their protest because that's -- -- you -- that works.
Beverly -- of -- -- LC and Charles Nelson of University of Delaware thank you both very much for making it time for us reporters' roundtable arguments lot of stuff to think about if we think about investing in these companies that think will it will take a more critical look at how that structure so again thank you very much for the time.
And if you want to follow up on this show you can find links in show notes at.
Reporters at cnet.com. Slash reporters around and wait hang on the reporters' roundtable dot cnet.com -- and an email to the roundtable roundtable -- -- economic development -- RA -- that's --
Next week another great show and that's Friday at noon Pacific time again thank you bad thank you Charles thanks you for producing.
With economically by.
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