New Crisis for Company After Death of Bed Bath & Beyond CFO

New Crisis for Company After Death of Bed Bath & Beyond CFO

The passing of Bed Bath & Beyond CFO Gustavo Arnal on Friday, which the retailer announced on Sunday, puts the business in another crisis.

According to Reuters, the chief financial officer died on Friday after falling from the “Jenga” tower in New York’s Tribeca neighbourhood.

NBC News reported that Arnal, 52, passed away “days after the retail chain announced it would close about 150 of its more than 700 namesake stores and lay off about 20% of its 32,000 employees after its stock fell more than 21% last Wednesday and 65% in the past year, according to The Associated Press.”

The home-goods retailer is trying to cut expenses and raise money as it wears out trying to fix recent operational errors and navigate a difficult economic climate. According to the Wall Street Journal, “Apple has been depleting its financial reserves for several quarters, and a consumer exodus has damaged investor and vendor confidence.”

Board of Directors statement

“I would like to send Gustavo’s family our deepest sympathies. Gustavo will be remembered for his leadership, talent, and management of our Company by everyone with whom he worked. I feel honoured to have worked with him, and he will genuinely be missed by everyone who had the privilege of knowing him, including all of us at Bed Bath & Beyond,” said Harriet Edelman, the independent chair of the Bed Bath & Beyond Inc. board of directors.

Few businesses have established succession plans.

The untimely passing of senior corporate executives, which can cause a crisis for businesses and organisations, emphasises the necessity of succession planning, policies, and processes, as well as the significance of include such occurrences in crisis management plans.

• According to PWC’s 2021 Family Business Survey, just 34% of polled family-owned businesses had a “strong, documented and articulated succession plan in place.”
• The National Association of Corporate Directors reported that fewer than one in four private firm boards had a structured succession strategy in place.

Another dilemma has arisen for the corporation as a result of Arnal’s passing amid its problems and obstacles. Bed Bath & Beyond did not say whether he will be replaced or if an interim replacement would be found in their release from today.

Requests for response from the retailer for this article were not promptly fulfilled.

The key is “A More Proactive Approach”

According to Catherine Rymsha, a visiting lecturer in management at the University of Massachusetts Lowell, “One firm I deal with used to plan for execs primarily for crises, without any regard for readiness of successors.”

While having an emergency plan is useful, she suggested that organisations adopt a more proactive strategy when naming and training their successors.

When employees don’t perceive opportunities for job advancement, they may leave certain firms since they aren’t even informed that they are the successors. The technique becomes much more helpful when a senior executive dies away abruptly. It puts pressure on HR and top management to rapidly fill the position, according to Rymasha.

But she cautioned that if they choose an unsuitable applicant for the position, this could quickly become a nightmare scenario.

Consider the Unexpected

“It’s crucial that businesses recognise that, even if a senior leader is currently well, there may be situations in which they die away suddenly. The coronavirus has taught us to be prepared for the unexpected. The best time to prepare for a crisis is before one arises, according to Charity Lacey, vice president of Gregory FCA and communications expert.

Engaging your communications staff right away is crucial for firms without a succession plan that lose a key team member. Their fundamental skill is knowing which external stakeholders need to be informed when and how.

Internal teams, partners, suppliers, clients, shareholders or other financial stakeholders, analysts, and the media may be included in this. The first stage in creating a programme should be identifying which audiences want information sooner than others and making sure that it is communicated in a timely manner while respecting the family’s desires, according to Lacey.

No Justification

“There is no compelling justification to excuse the widespread error of failing to plan for business succession. Some corporate executives are excessively preoccupied with today’s problems. Some people subconsciously dislike the idea that they won’t live forever, or they believe succession will occur organically, according to Deloitte.

Others feel the endeavour to be too difficult and are aware of its full intricacy. The organisation cautioned that in the end, the reasons people shun succession planning aren’t as significant as the reasons they should embrace it.

Considering other things instead

According to a post on the Harvard Law School forum on corporate governance last month, “Understandably, many companies have been preoccupied with the major economic disruption in the market and may not have invested the time or leveraged the expertise of their board members to focus on effective CEO succession planning.”

But if you’re not thinking about it right now, you might need a wake-up call, especially in the very competitive job market of today. For businesses that are unprepared, everything points to a hiring desert. Although some businesses are late to the party, it’s still not too late. Boards can take action right away to make sure that their plans are equipped to handle future challenges, according to the post.