Directors & Boards: Column

Home |

Subscriptions |

Articles Archive |

Current Issue |

Back Issues |

Shopping

Advertising |

List Rental |

Editorial Calendar |

Background |

Column

Robert H. Rock
Chairman and Publisher
Directors & Boards

Is 60 the Time to Move On?

An early retirement policy for the CEO can seem like throwing out a scarce resource, but maybe it helps keep a company young in both age and spirit.

By Robert H. Rock

In September I attended a Genesis concert with a friend who is the CEO of a Fortune 100 firm. (For those who don’t remember Genesis, it’s a rock band formed in the mid-’60s featuring Phil Collins.) My friend turned 60 this fall and is set to retire this year after a highly successful seven-year tenure as CEO. Although still very active, both mentally and physically, he is retiring at this relatively young age as is customary for his company and for his industry.

As we sang along with Phil Collins, I wondered whether “early retirement” was good for him or for his company.

As he contemplates what might lie ahead, my friend is being offered opportunities to participate at the highest levels of business, government, civic, and charitable organizations. A recognized world-class business leader, he is weighing these opportunities to determine whether they fit with his interests and talents.

His early retirement will be filled with interesting and important posts, including his pick of the most prestigious boards of directors. He will continue to lead an extraordinary life, making significant contributions while having more time to spend with his equally extraordinary wife and family.

60 Is the ‘New 40’
For the company, retiring a highly successful CEO at 60 may seem like throwing out a very scarce resource in his prime. Sixty is very young; the “new 40” as those of us in our late 50s like to believe (though we resort to earplugs to soften the rock music).

Is 60 the appropriate time for a CEO to move on?

In some highly innovative industries, such as investment banking, high tech, and pharmaceuticals, CEOs often retire early. In these industries, companies stay young by giving the up-and-comers the opportunity to race ahead. High-potential young managers are challenged to prove themselves early on in their careers. Those who are successful are quickly moved up through the ranks, and by the time they are in their mid- to late 40s some are ready to compete for the top job.

Encouraging the Young Turks
These dynamic companies stay young both in age and in spirit. Continual training and development, including “stretch” career-pathing, are hallmarks of these companies, which enable them to attract, retain, and motivate highly talented and very ambitious young managers. Their corporate cultures encourage and reward young turks to push ahead.

In many old-line companies, there are often few if any internal candidates for chief executive, necessitating them to look outside for a successor. In my friend’s company, three highly qualified inside candidates have been in the running. Each has successfully managed a series of top positions, including bottom-line accountability for a major part of the company, and has been further tested through special assignments to see how they handle big-picture strategic issues.

A Board Determination
Change comes fast, and companies need to keep up. They can stay young by placing a steady flow of young, talented mangers into key positions, including the top spot.

The board must determine when it’s time for its chief executive to hand over the reigns. Sometimes 60 is the right time.

For my friend, 60 is right for both him and for his company. He and I will continue to stay young by going to rock concerts, but we won’t forget to bring our earplugs!

Robert H. Rock is chairman and publisher of Directors & Boards. He is a director of several publicly traded companies and nonprofit organizations. He can be contacted at rrock@directorsandboards.com.