CEO transitions are an emotional minefield. Here’s how boards can avoid common and costly psychological traps

Dan Schulman, CEO of PayPal, speaks at a conference
Dan Schulman, CEO of PayPal, announced his retirement earlier this month.
Getty Images—Bryan van der Beek/Bloomberg

The post-pandemic CEO departures keep coming, with PayPal CEO Dan Schulman becoming the latest to announce his resignation. Last year, Starbucks’s Howard Schultz declared that he’d be leaving the coffee chain (for the third time) this spring, and Levi’s Chip Bergh is midway through passing the baton. 

Deborah Rubin, an organizational psychologist with the leadership consulting firm RHR International, has some advice as more retirements emerge: Don’t neglect the emotional dimension of the transition, a factor that sometimes goes overlooked in even the most detailed succession plans.

No matter the size of a company or the perceived emotional intelligence of its leader, navigating this shift in one’s identity is tough, says Rubin, and when not acknowledged, the stress of transitions can open the door to dark, costly behaviors. In service of their threatened egos, departing CEOs may unwittingly hang on to power for too long. Or, CEOs who feel stretched thin might begin dodging the most taxing duties of their role, leaving an overwhelmed successor to pick up the slack before their first real day on the job.

“Personal frustrations with the pending loss in status and power, along with perceived slights, can lead the current CEO to start criticizing the next leader to the board or other key internal and external stakeholders,” Rubin wrote in a recent blog post aimed at retiring CEOs.

Boards play a role in diffusing potentially damaging tensions, Rubin tells me. They should gently guide CEOs through this emotional landmine by normalizing their feelings and acknowledging it will be hard to say goodbye.

Directors who feel close to a CEO might take the leader out for dinner to chat about what they’re experiencing. These conversations represent a rare opportunity for directors to look backward, celebrating a CEO’s enduring legacy at the firm. (There will be plenty of time to focus on what needs to change in the organization, but this isn’t it.) Asking an outgoing CEO about their next big thing is also smart, says Rubin, who adds, “If you’re only leaving, that’s a lot more of a toll on the individual than if you’re moving toward something.”

Next week’s Modern Board will include a special guide for aspiring and new directors about presenting to a corporate board, a critical aspect of the directorship role. If you know someone with boardroom ambitions, let them know to sign up for the entirely free guide here. And if you’re on a board and have sat through dozens or hundreds of executive talks, please share your notes! What makes the best presentations stand out? I’d love to offer readers insights from across the Modern Board community. Reach me at: 

Lila MacLellan


“As human beings, we see potential in one another and grow from another’s experience and attention, which is what good chairing is about—eliciting the best from all those around the table, with the goal that in the contact sport that is governance, the outcome evolves to suit the questions arising, not the questions that once arose.”

Shefaly Yogendra, a governance and decision-making specialist and board member of several U.K.-based listed companies 

On the Agenda

👓 Read: A Stanford professor explains how Microsoft outperformed Google in a multiyear study of top companies for perpetual innovation.  

🎧 Listen: The outdoor apparel company Cotopaxi is mixing purpose and profit, much like the sector giant Patagonia, but with a distinct style and strategy. Its CEO, Davis Smith, describes how he broke into the crowded category on Fortune’s Leadership Now podcast.

📖 Bookmark: Boards are feeling more upbeat about consumer demand and believe it will remain steady this year, according to the latest monthly Director Confidence Index by Corporate Board Member and Diligent Institute. (Diligent sponsors this newsletter.) See the Index's full archive here.


Peter Clare, CIO of corporate private equity at Carlyle Group, is stepping down from the company and resigning from its board. Workday appointed Sayan Chakraborty, copresident of the company, and Mark Hawkins, former CFO of Salesforce, to its board. Diana Murphy, managing director at private equity group Rocksolid Holdings, and Vanessa Wittman, former CFO of Glossier, were tapped to become independent directors for AIG. Boeing nominated Sabrina Soussan, CEO of Suez Group, as a director. Overstock appointed Joanna Burkey, CISO at HP, to its board. MGM Resorts cast Ben Winston, a noted producer for shows like The Late Late Show with James Corden, and The Kardashians, as a board member.

In Brief

- Disney is driving right over the Brooklyn Bridge, and Nelson Peltz is thrilled about it. “Wait, what?” you ask. You’ll have to read Fortune’s exclusive interview with the activist investor to understand.

- Peter Gleason, CEO of the National Association of Corporate Directors, is not a fan of the new universal proxy rule, though he sees a silver lining: “[L]osing control of the proxy process may be just the jolt that boards needed to do a better job with nominations, evaluations, and communication.”

- Nine members of the McDonald’s board won a lawsuit over their handling of sexual misconduct allegations at the company.

- JPMorgan CEO Jamie Dimon was personally interested in acquiring the finance startup Frank, its 30-year-old founder claims. JPMorgan, which acquired Frank for $175 million, is suing the smaller company for allegedly lying about its customer base.

- Airline boardrooms notably lack gender diversity as other sectors continue to progress.

Editor’s Pick 

Right-wing critics and big business lobby groups are suddenly flooding Lina Khan, the 33-year-old chair of the Federal Trade Commission, with the kind of negative attention usually reserved for policymakers in more prominent roles—think Democratic Massachusetts Sen. Elizabeth Warren and Democratic New York Rep. Alexandria Ocasio-Cortez. In a new feature, Businessweek’s Emily Birnbaum looks into what's fueling the backlash. 

Here’s a snippet:

“Since 2021, Khan has been mentioned in 43 editorials, op-eds and letters to the editor in the Wall Street Journal. Jonathan Kanter, who heads the US Department of Justice’s antitrust efforts, appears in five. Khan’s critics have gotten personal at times, and some people say it’s impossible to ignore their sexist tone. ‘There is no doubt that Chair Khan is being subjected to what’s really a disproportionate level of critique that is not based in the substance. It’s really based in personal attacks on her gender, her race, age and then also the fact she is trying to use an agency’s authority to enforce the law, which has not been done for a generation,’ says Morgan Harper, director of policy and advocacy at the American Economic Liberties Project, which supports strong antitrust action.”

Read the full piece here, and have a great weekend.

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