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Stock market slump proves that Ferguson will be sadly missed

There's nothing like stock markets to put you in your place.

You might think you're the only CEO to keep your listed company together but there's every chance that when you announce you're leaving your leather chair and mahogany desk for pastures new the markets will tell you what they really think.

Take Barclays, for instance: when the ultimate Barclays man Bob Diamond announced his resignation the bank's shares climbed 1.9% but that was minuscule to the relief markets have shown for others who have jumped.

Earlier this year gas company Chesapeake saw it's shares jump 10% after its chief executive Aubrey McClendon stepped down while those of US internet company Pandora rallied by a significant 20% after its boss Joe Kennedy stepped down.

It seems that there are times when the markets think it's time for a change and the best way to do that is to get rid of the person at the top.

But for every chief that has seen their former company's stock price rally when they've picked up their P45, there are plenty who the markets can reveal will be sadly missed.

It didn't take a genius to figure out that Sir Alex Ferguson is such a figurehead at Manchester United and the club, or more accurately, company's shares reacted accordingly, falling 3% on the open and still 1.6% down at the time of writing.

That recovery is probably because the other managers being punted as potential replacements are held in pretty good esteem by the markets and although an actual succession plan doesn't look to have been in place, there were well-pointed reserves waiting in the wings.

That's a lesson for all companies as although its good to have a strong leader that holds the business together, you never know when she or he will be stepping aside or unable to turn up for work one day.

If you don't have a plan in place when their seat is empty then you run the risk of uncertainty amongst customers, suppliers and, more importantly, your employees.

Belfast Telegraph


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