Latest / Boardroom Conversations with Fexingo: CEOs, Strategy, and Corporate Leadership Explained / How the Disney Board Handled the Succession Crisis
Transcript
- Lucas: So, July 15, 2026 — and the Walt Disney Company just reported its third-quarter earnings last week. Revenue came in at 23.2 billion, up six percent year-over-year. The parks business is still the cash cow, streaming is finally profitable. But none of that is really the story, is it? Luna: The story is that Bob Iger is still there. He came back in 2022, said he'd stay two years, and now it's 2026 and he's still in the chair. What does that say about the board? Lucas: It says the board hasn't solved its biggest problem — succession. And that's what I want to drill into today. Because the Disney succession saga between 2020 and 2024 is arguably the highest-profile board failure in modern corporate history. And it's not just about picking the wrong person. It's about process. Luna: Walk me through the timeline. Iger was CEO for fifteen years, right? From 2005 to 2020. Lucas: Correct. And in February 2020, he hands the keys to Bob Chapek, who had been running the parks division. Now, the board at that time — chaired by a guy named Bob Iger — effectively. Iger remained executive chairman until the end of 2021. So the board wasn't truly independent during the transition. Luna: That's the first red flag. The outgoing CEO staying on as chairman while the new CEO tries to establish authority. Lucas: Exactly. And Chapek's tenure was a disaster in slow motion. He made a series of missteps — the Scarlett Johansson Black Widow dispute, the Florida Don't Say Gay controversy where he stayed silent too long, the restructuring that alienated creative executives. By November 2022, the board fired him after just twenty-eight months. Luna: Twenty-eight months. That's not even one full strategic cycle. And then they bring back Iger, who's seventy-one at the time. Lucas: Seventy-one. And the board gives him a two-year mandate to find a successor. That was November 2022. Here we are in July 2026 — nearly four years later — and Iger is still CEO. The board extended him twice. Luna: So what went wrong structurally? Was it just bad luck with Chapek, or are there deeper board failures? Lucas: I'd say there are at least four structural mistakes the Disney board made. First — a rushed succession timeline. Iger announced his retirement in February 2020 and the board named Chapek the very same day. That suggests the board had not done serious succession planning. They picked the internal candidate who was least likely to leave a power vacuum. Not the best candidate. Luna: So no external search, no deep bench development. Just 'here's the parks guy, he'll do.' Lucas: Second mistake — they failed to align CEO incentives with long-term strategy. Chapek was incentivized to cut costs and boost short-term margins. He slashed the creative budget, centralized decision-making, and focused on direct to consumer subscriber numbers. That's what the compensation plan rewarded. Meanwhile, the core asset — creative talent — was walking out the door. Luna: So the board designed a comp plan that encouraged exactly the wrong behaviour. Classic governance failure. Lucas: Third — inadequate board refreshment. The Disney board in 2020 had an average tenure of over ten years. Several directors had served since the early 2000s. Long-tenured boards tend to become less critical of management, especially when the outgoing CEO is still in the room. Luna: And Iger was still in the room. He was executive chairman until the end of 2021. So the board was essentially overseeing the successor while the predecessor was watching. Lucas: Fourth — they underestimated shareholder activism. In early 2024, Nelson Peltz and his fund Trian Partners launched a proxy fight. Peltz argued the board lacked focus and that Disney's stock had underperformed. He wanted a board seat. The board spent tens of millions fighting him, and ultimately won — but only barely. And the fight exposed just how unhappy large shareholders were with the board's oversight. Luna: So the board survived Peltz, but Iger is still CEO, and the succession question is still unanswered. Is the board any closer to a solution today? Lucas: I think they're closer in process but not in outcome. In 2023, the board appointed a succession committee and hired an executive search firm. They've reportedly interviewed external candidates — including some big names from tech and media. But Iger has said publicly he's not leaving until the company is 'on a clear path.' That gives him a lot of discretion. Luna: Which means the board is still in Iger's shadow. If he doesn't want to leave, they can't force him out without a crisis. And if they do pick a successor, that person has to follow an icon — twice. Lucas: That's the real lesson for any board with a long-serving, charismatic CEO. Succession isn't a one-time event. It's a process that starts years before the CEO leaves. And it requires a board that's independent enough to push back. Look at Apple — Tim Cook was announced as successor in 2011, but Jobs was sick for years. The board had time. Disney didn't give itself that time. Luna: You know, this conversation reminds me why it's so valuable to have spaces where we can dig into these governance questions without the usual corporate spin. And if you find these conversations useful — whether you're a board member, an investor, or just someone who wants to understand how big decisions get made — there's a way to support the show that keeps it independent and ad-free. Lucas: Yeah, a few listeners have asked how they can help. It's simple: if these episodes have given you a new framework or just a better understanding of how boards actually work, you can buy us a coffee. The page is buy me a coffee dot com slash fexingo. No pressure, no perks, just a way to keep the lights on. Luna: Exactly. And we really appreciate every contribution. It lets us spend time researching episodes like this one instead of chasing sponsors. Lucas: So back to Disney — the big question for investors and governance watchers is whether the board will finally name a successor by the end of this year. Iger turns seventy-five in February 2026. The board's own guidelines say the mandatory retirement age for directors is seventy-two. But the CEO is exempt. That exemption itself is a governance weakness. Luna: So you're saying the board should either enforce the retirement age for the CEO or change the guideline. Otherwise it's just window dressing. Lucas: Exactly. And that's the kind of small structural detail that separates a strong board from a compliant one. It's not about the personality of the CEO. It's about the systems the board builds to ensure continuity. Disney hasn't built that system yet. And until it does, every earnings call is going to include the question no one wants to answer: who's next? Luna: And when you look at it through that lens, the Disney story isn't really about Bob Iger or Bob Chapek. It's about a board that failed to plan for the inevitable. And that's a lesson for every company with a dominant leader. Lucas: Right. Succession isn't a personnel decision. It's a governance discipline. And Disney is still learning that lesson the hard way.