Big news this week in Decatur.... especially for those of us with a vested interest in ADM.
(for those not familiar with the importance of the 3 letters "ADM": Archer Daniels Midland Company)
The torch is being passed.
We're gonna have a new leader as of 1/1/15.
And, it's being passed to a gentleman whom many of us greatly admire and respect.
Read below.
Out for now......
Matt
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Joe Cahill
Crain's Chicago Business
The handoff of power at Archer Daniels Midland Co. shows how far the big grain processor has come in the past decade.
For the most part, ADM is handling its CEO transition as a publicly traded company should. And that's saying something, as anyone familiar with ADM's history knows.
ADM identified Juan Luciano as a potential CEO some time ago, after he was recruited from Dow Chemical Co. in 2011 to serve as chief operating officer. Earlier this year, he picked up the additional title of president, signaling his likely ascension to the top job.
So nobody was surprised when Chicago-based ADM announced yesterday that Mr. Luciano would succeed Patricia Woertz as CEO on January 1. That's why the stock barely budged on the news
“When I joined ADM in 2006, one of the areas the board asked me to focus on was leadership development and succession planning, with the goal of ensuring an eventual seamless and successful transition to the next CEO,” Ms. Woertz said in a statement announcing the news.
If there's any room for criticism, it's on the back end. ADM is allowing Ms. Woertz to retain the title of chairman until her retirement in May 2016. Keeping an ex-CEO around as chairman raises the possibility of “second-guessing the successor,” says Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. “It's a better practice to have the CEO retire as chairman when he or she retires as CEO.”
Still, this is better than ADM might have done, and better than others have. Many companies mishandle CEO successions, often because boards of directors quail before powerful CEOs who either don't want to step down at all or who hang around indefinitely as chairman, raising questions about who's really in charge.
That's how it used to be at ADM, where Dwayne Andreas and his relatives ruled the place like a hereditary fiefdom. Eventually that insularity and unchallenged power collapsed in a price-fixing scandal that ended the Andreas reign.
Yesterday's smooth CEO transition puts that era even further in the past for ADM. Progress began in 2006, when ADM recruited Ms. Woertz from Chevron Corp.
Ms. Woertz's tenure wasn't an unalloyed success. A big bet on ethanol hasn't paid off, and shareholder returns have lagged the broader market since she took over. On the plus side, she instilled more financial discipline at ADM, while expanding the company's global footprint. The shares have outperformed recently, and third-quarter earnings were strong.
Her greatest contribution may be in bringing ADM's corporate priorities and practices in line with expectations for modern, globe-spanning public companies. If shareholder returns didn't always beat the market, at least she made clear that was the goal.
Among her most important actions was moving the company's headquarters to Chicago, a city with the global profile and travel connections a company like ADM needs. The move makes it easier for ADM executives to keep track of their sprawling operations, and also helps the company attract talent. Just as important, it raised the company's profile, inviting a healthy scrutiny of bad habits that might have gone unexamined when ADM was hidden away in Decatur.
Here's hoping Mr. Luciano sticks to the same path.