Board leadership and governance for clear-sighted CEO succession at Air New Zealand

Abstract

In this case study we address the issue of CEO succession drawing directly on the experience of the board of directors of Air New Zealand. Despite extensive literature on CEO-board relations, there has been a scarce number of studies on managing the processes of CEO succession and appointment from the board perspective. Drawing on documentary sources as well as in-depth interviews with all board members and CEOs appointed in the period 2002–2013, we shed light on this important governance process primarily for teaching purposes. We emphasise the board’s role in the context of the transformation of the airline into an award-winning, financially performing company in a highly competitive and mature industry. The case study examines how the board developed, implemented, and managed a succession process for three CEOs that was sound in design and achieved its desired benefits. By focusing on board leadership and board processes our case study provides evidence that independent boards can shape a specific combination of governance practices which contribute to successful CEO transitions.