Presented by: Gagandeep Singh Manu Dhunna Pousali Chakrabarty Rahul Khedkar Shashank Badre Sreejith

Case Summary
Astar Enterprises :
 Headquarters- New Jersey  Products-Home cleaning, laundry care, personal hygiene and skin care  Prominence- New England and Mid- Atlantic states  Edward Bennett – CEO, 64 Years of age  Tom Calloway- Non executive Chairman since last 5 years, CEO of Puritan Bancorp when he left 5 years ago
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Case Summary
 Strong relationship between them

 Charismatic and entrepreneurial leader
 Tussle between the two over the contentious issue of

succession planning  Bennett insisted on staying focused in wake of new global policy instead of succession  Ann Renaldi- Executive from Radiant Corporation, Compensation Committee’s head  Fred Henderson: Nominees- Executive from Luton Industries, Nominating Committee
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Case Summary
 Reasons – Violation of SEC and NYSE rules.

 Upon the pressure created by the board he

succumbed.  Nominees:
 Tom Terrell - Sales and Marketing
 Marianne Klein - Executive Vice President of Corporate

services  Robert Glenn - Head of Consumer Products  Brian Jacobs - Vice President of Sales and Marketing

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Issues
• Constant aversion to the topic of succession planning by •

• •

Edward Bennett, Astar’s CEO. Touted as a immediate possible successor by Bennett, Terrell was a reputed person but there were concerns about his strategic ability. Robert Glenn, head of Astar’s Consumer Products Group, North America, had met with the board only for a few presentations Brian Jacobs - Board hardly heard of him Only Marianne Klein was familiar to the Board

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Issues
• Henderson’s argument about major lapse in the board’s


fiduciary responsibilities as well as a possible violation of SEC regulations and the rules governing listings on the New York Stock Exchange Astar was carrying a much higher level of debt Heightened institutional investors’ earnings expectations Several of Astar’s products were beginning to come under regulatory scrutiny in both the United States and Europe Its Untamed hair colour, for instance, had provoked a debate about the accuracy of its labelling

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Possible Alternatives
 Short Term Alternatives:

If CEO needs to be changed in some urgent situation what would be the contingency plan for choosing next CEO? - “Your three to five-year plan for a successor becomes immediate and that person may not be ready,” Alternatives: 1. The infamous "name in the envelope" for the next CEO or emergency candidate

Choose Tom Terrell, as suggested by Bennett himself

2.
3.

Next CEO from outside the company who had experience of leading similar operations as that of Astar (including Global Exposure) Name a consensus interim CEO in an emergency
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Strength and Weakness
 “Name In The Envelope”:
Strengths: Familiar with Astar’s work culture and its various operations Familiar with Astar’s mission and vision Weakness: Exclusion of potentially better ones If any internal candidate is selected, it is likely that at least one of them will be dissatisfied with the results

 Next CEO From Outside The Company:
Strengths: Will bring in fresh perspective and have experience of handling similar operations as that of Astar’s Weakness: Non familiarity with Business Strategy, Mission and Vision

 Interim CEO: Executive Recruiters/ Large Consulting Firms/ Professional Interim CEO
Strengths: Expertise to lead the company until the next CEO is appointed Gives the board time to target candidates whose strengths align with the mission and strategic plan. Weakness: Makes sense if the organization is on sound financial and operational footing Interim CEO believes they are also qualified to be CEO
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Best Solution
 Short Term: Bringing in a professional interim CEO is the best means

of managing the transition period and setting up the company for long-term success  A skilled interim preserves organizational stability  The interim CEO provides insight into the qualifications needed in candidates for the permanent position  An interim CEO gives the board the best opportunity to fully evaluate permanent candidates

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Possible Alternatives
 Long Term Alternatives:

In long term the board diligently figures out potential CEO successor who aligns with Corporate Goals and Strategy Alternatives: 1. Develop The Talent:

Find each candidate’s areas of weakness and inexperience and create a training and development plan for each Give them overseas assignment , improve their technical or business skills under the supervision of Mr. Bennett

2.

Identify High-potential Talent:
Find the people inside and outside the company who have leadership potential and fit Astar’s CEO leadership profile

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Strength and Weakness
 Develop The Talent: Strengths: Familiar with Astar’s work culture and its various operations Familiar with Astar’s mission and vision Weakness: Difficulty in Evaluation Problem of failure of important live projects Tom Terrell is just 2 Yrs younger than Bennett 

Identify High-potential Talent: Strengths: Will bring in fresh perspective and experience of handling similar operations as that of Astar’s Weakness: Non acceptance by shareholders Non familiarity with business strategy, Mission and Vision Wrong candidate may cause blunder.

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Best Solution
 Long Term: Based on Past data it is evident that most successful

companies chose internal CEO successors who had more than 10 years experience at that company
 Astar should give extensive training to all four candidates and

choose one among them after evaluating on each selection criteria

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References
 Davis, Sandra, Ph.D. and Nosal, David, ‘Smart Planning For CEO


Succession’, 2009, The Corporate Board, Vanguard Publications Inc., pp – 17 to 21 http://www.russellreynolds.com/content/practical-guide-ceosuccession-planning http://biz.thestar.com.my/news/story.asp?file=/2012/10/30/business/12 242211&sec=business http://www.businessweek.com/stories/2011-06-23/why-so-manycompanies-fail-at-ceo-succession-planningbusinessweek-businessnews-stock-market-and-financial-advice https://www.besmith.com/thought-leadership/whitepapers/leadership-time-transition-top-10-benefits-interim-ceo

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