The Financial Times headline almost said it all: “Becht goes out with a bang as £2bn is wiped off Reckitt shares.” Bart Becht, chief executive of Reckitt Benckiser, has abruptly announced his departure from the household goods company he had steered to unprecedented success over the past 16 years. An instant £2bn personal valuation was his reward. A better launch-pad for a portfolio career would be hard to imagine, if that is what he has in mind.
But with the bouquet came a few brickbats as well. Could it be that arguably the most successful corporate businessman of his generation was also one of its most selfish? I’m not talking about the £90m “fat cat” cheque he received in 2009 for services rendered, but the manner in which he announced his departure.
Far from organising an orderly succession, Becht brutally declared he was going in September, leaving – by some accounts – the company rudderless. Or rather, in the hands of the no doubt competent, but almost unknown, Rakesh Kapoor. In so doing, he had arrogantly put his own interests ahead of those of shareholders, who had invested in the Becht marketing magic, mistakenly believing he would be there forever.
I’m afraid I don’t buy that argument in its entirety. All right, the announcement was a shock – Becht is only 54 and had given no previous indication of his desire to quit, from what we are told. But when you invest in personality, you also invest in that personality’s potency. The minute a successor is announced, the potency is diminished and the magic fades. Ask yourself why Elizabeth 1, a potent leader if ever there was one, never announced a successor until she was on her death-bed. Ask yourself why there is no successor in sight at WPP.
An interregnum, however defined, carries risks all of its own. Stakeholders (whether subjects or shareholders) worry about the competence of the successor, who can never be tried and tested enough. The barons/boardroom rivals become refractory and disloyal – why wasn’t one of them chosen? The former leader can’t quite bear the idea of stepping back and letting go: Sir Stuart Rose’s latterday conduct at Marks & Spencer springs to mind.
No, quit while you’re ahead. There’s a lot to be said for a clean, swift break. Shareholders will get over the shock in a surprisingly short time.