The Walt Disney Company Board of Directors announced that it has elected independent director Mark G. Parker as Chairman of the Board, effective following the Annual Meeting of Shareholders. This post shares the official announcement plus our commentary and context about how this fits into the bigger picture of the Battle of the Bobs and Iger’s succession planning.
Mark Parker is a seven-year member of the Walt Disney Company’s Board and the Executive Chairman of Nike. Parker will succeed Susan E. Arnold, who is ineligible for re-election pursuant to the 15-year term limit under Disney’s Board Tenure Policy. Rather than filling the empty seat, the size of Disney’s Board of Directors will contract to 11 members.
“Mark Parker is an incredibly well-respected leader who over seven years as a Disney director has helped the Company effectively navigate through a time of unprecedented change,” Ms. Arnold said. “During his four decades at Nike, Mark has led one of the world’s most recognized consumer brands through various market evolutions and a successful CEO transition, and he is uniquely positioned to chair the Disney Board during this period of transformation.”
“Mark Parker’s vision, incredible depth of experience and wise counsel have been invaluable to Disney, and I look forward to continuing working with him in his new role, along with our other directors, as we chart the future course for this amazing company,” said Robert A. Iger, Chief Executive Officer, The Walt Disney Company. “On behalf of my fellow Board members and the entire Disney management team, I also want to thank Susan for her superb leadership as Chairman and for her tireless work over the past 15 years as an exemplary steward of the Disney brand.”
Said Mr. Parker: “I am honored to have the opportunity to serve as Disney’s Chairman, and I look forward to working closely with Bob and his management team on a strategy of growth that balances investment with profitability, while preserving Disney’s core mission of creative excellence, to deliver shareholder value. At the same time, it is the top priority of mine and the Board’s to identify and prepare a successful CEO successor, and that process has already begun.”
The Walt Disney Company Board has continued to evolve to ensure it has the right combination of backgrounds, skill sets and perspectives to guide the Company into the future. Today, Disney’s directors bring experience across a relevant range of disciplines, including brand, marketing and retail, direct-to-consumer expertise, and technology and innovation.
The Board is nominating for re-election at the Company’s Annual Meeting incumbent directors Mary T. Barra, Safra A. Catz, Amy L. Chang, Francis A. deSouza, Carolyn Everson, Michael B.G. Froman, Robert A. Iger, Maria Elena Lagomasino, Calvin R. McDonald, Mark G. Parker and Derica W. Rice.
In the same press release, Disney also made the wholly unsurprising announcement that it opposes activist investor Nelson Peltz’s attempt to join the board. Late last year, Peltz’s Trian Group took an $800 million stake in Disney and began pushing for a board seat. Trian is seeking operational improvements and cost-cutting, while also opposing Bob Iger’s return as Disney’s CEO. On that basis alone, it was pretty obvious that Disney was going to rebuff Trian’s attempts to gain influence on the company.
“The Walt Disney Company remains open to constructive engagement and ideas that help drive shareholder value. While senior leadership of The Walt Disney Company and its Board of Directors have engaged with Mr. Peltz numerous times over the last few months, the Board does not endorse the Trian Group nominee, and recommends that shareholders not support its nominee, and instead vote FOR all the Company’s nominees,” Disney stated in its press release.
This further ups the ante in what’s likely to be a big and messy power struggle. We almost certainly have not heard the last of this, and it may become a topic of contention as soon as the earnings call next month. However, this is a fan blog and not Bloomberg, so we’ll table that topic for now.
More notably to the future of the company, incoming Chairman of the Board Mark Parker will also head the newly created Succession Planning Committee of the Board. This will advise the Board of Directors on CEO succession planning, including review of internal and external candidates. Mr. Parker served as Nike’s Chairman and CEO until 2020, when he became Executive Chairman.
This is a big deal. In the original announcement that Bob Iger was returning, the Walt Disney Company stated that it was “with a mandate from the Board to set the strategic direction for renewed growth and to work closely with the Board in developing a successor to lead the Company at the completion of his term.” This was undoubtedly a conscious inclusion, as Iger had infamously avoided proper succession planning, arguably pushing aside multiple worthy heir-apparents and extending his own reign as a result.
Even if you’re not a Nike fan, you might recognize the name Mark Parker. That’s because he came up during the whole Battle of the Bobs palace intrigue back in November. There were leaks then that some members of Disney’s Board wanted to replace Chapek and appoint Nike chairman Mark Parker as a stopgap CEO during the search process.
However, sources indicate that Parker declined the role multiple times. General Motors executive Mary Barra also advocated replacing Chapek at the June meeting of the board.
However, not every member of the board was on board with replacing Chapek over the summer. Most notably, departing Board Chairman Susan Arnold advocated for Chapek. According to reports, she sided with Chapek from the beginning, even before Iger left. At every turn, she reinforced her belief that Chapek should be given a chance to run the company.
In the aftermath of Rice’s firing, Arnold released a supposedly unanimous statement of board “confidence and support” for Chapek. At that time, industry chatter noted that the statement was hollow without a contract renewal for Chapek, which was the true show of confidence. “You let the CEO get within a year of his contract being up,” one industry power player said at the time. “That by itself is a statement of non-support. A vote of confidence is nonsense.”
When the board discussed Chapek’s contract last June, some wanted to extend it for only two years. Arnold argued that would undercut Chapek, so a compromise was reached: Chapek’s contract was extended for three years but backdated. That left slightly more than 2 years remaining on his deal with Disney. Of course, we all know how that ended.
Arnold’s allegiances to Chapek make me wonder if she would’ve been out as Chairman of the Board even were she not ineligible pursuant to the 15-year term limit under Disney’s Board Tenure Policy. Iger seems like one to value loyalty, and not take kindly to perceived slights. It’s also likely that he’ll want to consolidate power and have allies on the Succession Planning Committee of the Board.
Since his return, there has been endless speculation about potential successors to Iger. Internal CEO candidates have already been identified who might be able to take the job over time by Disney’s Board. That actually happened while considering how to replace Chapek, but the Board didn’t want to put someone new in that position given all various pressures on the company.
There are senior executives at Disney who could be groomed into chief executive material, including Dana Walden, Disney’s television chief, and Josh D’Amaro, Disney’s theme park chairman. But the Board doesn’t think either is quite ready.
None of this should come as a huge surprise to those who have been following this saga. In Experts Predict Big Changes for Disney in 2023, Hollywood insiders shared their expectations for the company this year, and although they were all over the place, the general vibe was one of tumult. The industry is expecting executive leadership shake-ups, mergers, and more in 2023 for the Walt Disney Company. It would seem that has begun, only 11 days in!
In 5 Businesses Disney Should Buy or Sell, we suggested that Disney should acquire Candle Media primarily as a talent acquisition play for Mayer and Staggs. That duo serving as co-heads of Disney with an Eisner-Wells dynamic is a dreamlike scenario. It’s a great prediction from a ‘things that should happen’ perspective, but I’m far less certain of it from a ‘things that will happen’ perspective. Definitely a long shot, but Iger does take big swings.
Some insiders have speculated that McCarthy’s intimate relationship with the board could lead to Iger choosing her as his successor for CEO. In Disney CFO Rumored to Succeed Bob Iger as CEO, we essentially pleaded with Disney not to make the same mistake twice. Disney needs a charismatic storyteller in its top spot, not a numbers person. That doesn’t mean McCarthy is a bad CFO. To the contrary, what she did to navigate Disney through the rough waters of 2020 was masterful.
Ultimately, the creation of the Succession Planning Committee of the Board is a good move by the Walt Disney Company. The biggest blemish on Bob Iger’s legacy is his failure to do this in the past, which resulted in Bob Chapek’s Reign of Terror. As much as we’re happy to have Iger back at the helm, we also do not trust him to finally get succession planning right on his own. He’d probably just keep extending his tenure again and again if left to his own devices.
When it came out back in November that Susan Arnold had backed Chapek behind the scenes, I figured she wouldn’t be around much longer. (Granted, I had no clue she was approaching her 15-year term limit.) That was also when Mark Parker’s name came onto my radar as he was floated as an interim CEO, so I did a bit of reading about him. (Here’s a great profile on Mark Parker from Fast Company.)
Based on that and other profiles, I’ve gotta say that Mark Parker being Chairman and heading up the Succession Planning Committee is really good news. In his time at Nike, Parker became synonymous with the company’s rapid growth, technology growth, and product innovation. He was first hired as a footwear designer in 1979, worked on a variety of hugely influential products, and continued top-shelf designs for HTM, a collaboration between he and two other renowned designers.
Parker became Nike CEO in 2006 and remained heavily involved in product, design, marketing, talent deals, and the company’s Innovation Kitchen. (Not a kitchen for food–more like Imagineering’s R&D lab.) Even though they are dramatically different companies, it sure sounds like Parker obtained the well-rounded skillset at Nike that it would take to achieve success at Disney. He also sounds exactly like the type of obsessive creative leader that would be a perfect fit for the Walt Disney Company and its rich legacy. Perhaps it’s unfortunate that he didn’t take the interim role, but at least he’ll head the search and selection of Disney’s next CEO.
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YOUR THOUGHTS
What do you think about Mark Parker being named Chairman of Disney’s Board? Thoughts on the Succession Planning Committee or anything else discussed here? Optimistic that Iger will finally get choosing a successor right? Are you bullish or bearish about the company’s future as the Walt Disney Company enters its 100th year? Think things will improve or get worse throughout 2023? Do you agree or disagree with our assessment? Any questions we can help you answer? Hearing your feedback–even when you disagree with us–is both interesting to us and helpful to other readers, so please share your thoughts below in the comments!
