Dennis Carey Info.

In the article “Picking the Right Insider for CEO Succession,” Dan Phelan, Dennis Carey and Michael Useem discuss GlaxoSmithKline’s decision to have three internal candidates compete for the role of CEO. Each of the candidates were well qualified for the position, and so the company arranged for year-long CEO-level projects in order to compare the executives’ performances.

The article states: “The idea was to gather comparable data about the candidates. But because no two projects are alike- the candidates’ tasks were to rethink supply chain management, improve product safety, and redefine sales and marketing- GSK also invented a parallel process that few outside the company were aware of. It consisted of a completely confidential, outsider-led appraisal of the candidates from 14 internal executives who had worked directly with all three. One of us, Dennis Carey, conducted the interviews with the executives and provided feedback to Garnier and the board. The company also conducted the usual 360-degree assessments, but those reviews were deemed less helpful because they drew on the views of each candidate’s particular direct reports and bosses.”

The article goes on the explain that “Much of the media attention focused on the aftermath of the highly visible competition- would the losers stay or go? Indeed, retaining unsuccessful job seekers is an important issue for any company with internal CEO candidates. The two GSK contenders who didn’t get the post were offered substantial shares in the company and seats on the board as inducements to stay; nevertheless, both of them left last year.

“What was missed in the articles and blogs is perhaps the key lesson for corporations: A company would do well to establish parallel approaches to succession. Insiders often get the corporate top job- in fact, more than 80% of the current Fortune 100 CEOs were selected from within the companies’ ranks- yet the high turnover among CEOs is testament to the frequency with which companies pick the wrong insider. A set of parallel approaches allows a company to gather comparable data about internal candidates, with each process filling in the informational gaps left by the other.”

In 2009, Dennis Carey wrote an article discussing the SEC.

He wrote: “Amid all the chatter surrounding Apple CEO Steve Jobs’ ill health, one thing is clear to me: the Securities and Exchange Commission is also unwell.”

He went on the say: “But the Commission’s priorities are wrong, and its inquiry is misguided. Considering that in the Madoff case, the SEC failed to close in even after receiving tips for more than 10 years, it seems to me that its resources should be spent on ensuring that there are no other Madoffs at large, not hunting for a paper trail about Jobs’ physical condition. Regulation governing CEO health disclosure is unnecessary and impractical- and wasting our resources in this futile attempt won’t prevent another Madoff- like scandal.”

Carey added that even former SEC Commissioner Joseph Grundfest believed Apple had crossed no line.

Dennis Carey, an executive recruiter with Korn/Ferry International, co-wrote an article called “Shaping Strategy from the Boardroom.”

In it he wrote: “Linking a board’s human capital to the long-term strategy crafted by management to create more value for shareholders should be the next wave of governance reform. Boards may approve strategy, but, sadly, they have only minimal involvement in shaping and developing it. Now that innovation and growth increasingly drive the top executive’s agenda and major business trends emerge in the blink of an eye, strategically minded boards that forge close partnerships with management will prove to be the crucial difference between companies that create superior shareholder value and those that don’t.”

In an article entitled “Finding a New CEO,” Dennis Carey and Dayton Ogden discuss the appointment of a new CEO at GlaxoSmithKline. The co-authors explain why it is important to take CEO succession seriously, and not to push the task aside.

“After all, it’s human nature to avoid dealing with things that entail planning for your own demise. Yet, no CEO is ever completely safe from an abrupt end to a career, whether through illness, poor performance, or other reasons. No one is immortal and there is no guarantee that a CEO will remain with the company until retirement… Furthermore, succession planning is not a phenomenon that occurs only at the top of the organization. It’s an integral part of organizational development that continually identifies high-potential executives and provides them with opportunities to grow and develop,” they wrote.

Co-authors Patricia Anslinger, Dennis Carey, Kristin Fink and Chris Gagnon wrote an article explaining equity carve-outs. They wrote:

“The purpose of a corporate center is to do for the subsidiaries what they cannot do effectively for themselves. Many structures serve this purpose: operating companies, multibusiness companies, holding companies, conglomerates, and even invest firms such as Berkshire Hathaway- all are different ways for a single, central parent to deliver value to its business units. The newcomer to the list is the equity carve-out.”

They continued: “An equity carve-out is the sale by the public company of a portion of one of its subsidiaries’ common stock through an initial public offering (IPO). Each carved-out subsidiary has its own board, operating CEO, and financial statements, while the parent provides strategic direction and central resources. As in any other corporate structure, the parent can provide executive management skills, industry and government relationships, and employee plans, and perform time-consuming administrative functions, freeing the subsidiary’s CEO to concentrate on products and markers. What is different is the way in which the role of the corporate center is clearly spelt out in actual agreements.”

According to Dennis Carey, creating a bond between the human capital of the board and the management’s long term strategy will greatly benefit a company.

He says: “Now that innovation and growth increasingly drive the top executive’s agenda and major business trends emerge in the blink of an eye, strategically minded boards that forge close partnerships with management will prove to be the crucial difference between companies that create superior shareholder value and those that don’t.”

Dennis Carey, an executive recruiter with Korn/Ferry International, has experience in placing board members, chairman and CEOs for numerous companies, including American Express, Goldman Sachs, GlaxoSmithKline and others. On his website, ceosuccession.com, Carey discusses several practices that have a positive effect on the recruiting and succession processes:

1. “Take as much human drama out of the process as possible (keep in mind how hard it is on number twos)”
2. “Tie some of the CEO’s compensation to succession planning and progress”
3. “Pay directors in stock and ask them to make additional investments in the company’s shares”
4. “Calibrate the internal candidates with external ones”
5. “Develop a culture that encourages succession (a la Built to Last)”

Dennis Carey has a lot of experience in the field of executive recruiting and company management. He co-authored an article for the Wharton Leadership Digest, in which he discussed why it is important for new CEOs to meet with those who had previously held that position.
He wrote: “On top of the general problem of harnessing the energies of a company comes the cimple fact that a CEO may be very unfamiliar with some of the core responsibilities. Most new CEOs have never chaired a board meeting. Some may never even have attended one. Most have never had to forge a working relationship with a board-selected ‘lead director.’ Outside the boardroom, issues such as advertising, human resources, the press, Wall Street analysts, mergers, and board member recruitment, which consume large amounts of a CEO’s time and attention, are activities that most senior executives below the top job may have dealt with only on a very limited basis.”

A review on Dennis Carey’s Mergers and Acquisitions said:

“Almost every day the papers report another merger, buyout or joint venture. It’s difficult enough to keep track of who owns which company, but it’s even more difficult to know if your own company should join in the game. From valuation to integration, this collection helps managers think through what such a strategic move would mean for their organizations.” It continues, stating that the book “is designed to bring today’s managers and professionals the fundamental information they need to stay competitive in a fast-moving world. From the preeminent thinkers whose work has defined an entire field to the rising stars who will redefine the way we think about business, here are the leading minds and landmark ideas that have established the Harvard Business Review as required leading for ambitious businesspeople in organizations around the globe.”

In the Management section of the Wall Street Journal, an article discussed the increasing support of the separation of the roles of chairman and chief executive. The two roles are typically filled by one person, but recent firms have split the responsibilities.

Dennis Carey of Korn/Ferry International is among those who believe that splitting the roles will only complicate the management of a firm. Carey explained that the separation could cause competition between the two, as well as confusion in the lower level management and employees. The article quotes Carey as he states that most CEOs prefer to chair their boards because “they think having one boss at the helm is better than having two.”