One CFO's transition maintaining credibility and integrity.

• Author: Shelton, Henry Z., Jr.
• Position: Succession

Puzzlement or suspicion may be the first reaction from the investment community when a company announces that its CFO is retiring, especially in these days of heightened scrutiny of publicly traded companies and the public fears that such an announcement may be a precursor to bad news.

It is crucial that a retiring CFO works closely with the CEO to carefully structure a framework and process that is sensitive to these potential issues. Even routine announcements must deal with the omnipresent skepticism so prevalent in today's alarmist business environment.

While there are a myriad of company-specific factors to be considered, there are five key elements in a successful CFO transition process:

1. Make sure there is sufficient time for an effective transition.

2. Begin planning the communications and transition process early. Develop a comprehensive process that deals with all constituencies and factors.

3. Initiate clear, timely and candid communications with stakeholders to ensure the company's and your own continuing credibility and integrity.

4. Finance and corporate governance practices should be in top order so you can concentrate on succession rather than making fixes.

5. Your CEO must be fully committed to directing the process.

As I formulated my own plans for retirement, I was determined that my company, USEC Inc.--the world's leading supplier of enriched uranium fuel for commercial nuclear power plants--would have sufficient lead time to develop and implement a process creating the best possible outcome for our key constituencies. I first began discussing retirement with CEO William H. Timbers last fall. The audit committee and the full board of directors were also involved. I shared with them the fact that I was flexible about timing in order to ensure that there would be no gap in the company's financial stewardship, but I did indicate a desire to retire sometime in the summer. All agreed that the timing had to be flexible to ensure an optimal transition.

When I made the decision to retire this past March, Timbers directed the development and implementation of the transition process. He began discussions with an executive search firm and helped prepare the job specifications. Internally, very few people were included in the planning process. The general counsel was informed, and the vice president of corporate communications, director of investor relations and our outside public relations and investor relations counselors were...