Why didn't Nvidia have a succession plan?

SPEAKER_1 (0:00)

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Kimberly Adams (1:01)

It's a good idea to have a backup plan, especially if you happen to be a company anchoring the world's AI industry.

From Marketplace in Washington, I'm Kimberly Adams. Until this week, NVIDIA only ever had one CEO. Jensen Huang served in that role for decades. Now, Colette Kress, previously the company's Chief Financial Officer, will temporarily take on the head job. It's been widely reported that NVIDIA had no clear succession plan. So a big question is, why?

Marketplace's Stephanie Hughes reports.

Stephanie Hughes (1:33)

If you're on the board of a company, you've got one main job, says Santa Clara University Management Professor Joellen Posner.

Joellen Posner (1:41)

Hire, evaluate, and fire the CEO.

Stephanie Hughes (1:44)

That includes planning for the next one. Posner says one situation when a board might not be actively doing that planning, is when the company's founder is also still its CEO.

As was the case with NVIDIA.

Joellen Posner (1:56)

And so there's a perception that that person can't be touched, right?

Stephanie Hughes (2:01)

Posner says some Silicon Valley firms have boards where the members have been around a long time, or were early investors in the company, and they're no longer a good check on company leadership.

Joellen Posner (2:11)

They cannot provide the kind of oversight and partnership that a CEO needs to be successful in the long term.

Stephanie Hughes (2:18)

Also, good succession planning involves having other executives besides the CEO start to take responsibility and make decisions for the company, says University of Pennsylvania law professor Jill Fish. Sharing control can be hard. The CEO may not want to give up that much power or may just disagree.

Fish says it's important to remember Nvidia is not its CEO, and it's really the products a company makes that are crucial to its long-term success. I'm Stephanie Hughes from Marketplace.

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Try Odoo for free at odoo.com. That's odoo.com.

Kimberly Adams (3:35)

Open enrollment season is upon us. At some point this month, you'll likely have to pick the plan you want for next year if you're among the majority of people who get their health care through work. And there's a good chance you'll find it's more expensive. For people with employer-sponsored insurance and the companies that offer it, health care costs are rising faster than inflation. This year, the premiums businesses pay for health care rose about 5 percent on average, and next year they're projected to rise about 8 or 9 percent. For some, it's much more than that. Marketplace's Samantha Fields talked to one small business that's struggling to navigate those higher costs.

Samantha Fields (4:11)

If you've ever gone thrifting in New York City, you've probably been to Beacon's Closet. It has four stores where you can buy, sell or trade vintage and modern clothing.

Cindy Wheeler (4:21)

We just celebrated our 30th anniversary this past summer.

Samantha Fields (4:24)

Cindy Wheeler has been working for Beacon's Closet for 27 of those 30 years. She's now a co-owner and vice president and operations manager.

Cindy Wheeler (4:33)

This is the most nerve-racking time of year for all of us, in particular for me.

Samantha Fields (4:38)

Because it's her job to figure out health insurance for their 50 or so full-time employees. This year is particularly nerve-racking, because when the company got its renewal letter from Anthem, Blue Cross and Blue Shield at the end of September, they came to us with a 59.5% increase.