Friday’s death of Bed Bath and Beyond CFO Gustavo Arenal, which was confirmed by the retailer on Sunday, marks another crisis for the company.
The chief financial officer fell from New York’s Tribeca skyscraper known as the Jenga Tower on Friday afternoon, Reuters reported.
The passing of Arnal, 52, comes days after the corporate store reported it would close around 150 of its in excess of 700 name-stores and lay off around 20% of its 32,000 workers as its stock endured. Had fallen more than 21% on Wednesday and 65% in the previous year according to the Associated Press NBC News said.
The home-goods seller is attempting to reduce costs and raise funds as it grows tired of trying to fix recent operating missteps and navigate a challenging economic environment. Cash has been burning through stores for several quarters, according to the Wall Street Journal, and a shopper’s exodus has shaken investor and seller confidence.
Statement by Board of Directors
I might want to communicate my most profound sympathies to Gustavo’s loved ones. Gustavo will be recalled by all with whom he worked for the initiative, ability and authority of our organization. I’m glad to be his associate, and he will be genuinely missed by all. We at Bed Bath & Beyond and everyone who has had the pleasure of knowing her, Harriet Edelman, independent chairman of the Board of Directors of Bed Bath & Beyond, said in a statement.
Some companies have succession plans
The sudden death of top corporate executives, which can create a crisis for companies and organizations, underscores the need for succession plans, policies and procedures, and the importance of accounting for such incidents in crisis management plans.
According to PWC’s 2021 Family Business Survey, only 34% of the family-owned companies surveyed had a “strong, documented and communicated succession plan.
The National Association of Corporate Directors states that less than one in four private company boards have a formal succession plan. Arnal’s death comes amid the company’s challenges and issues, another crisis for the organization. In its announcement today, Bed Bath & Beyond made no mention of plans to name his successor or if anyone would fill his role on an interim basis.
A more proactive approach is important
Katherine Rimshaw, guest lecturer in management at the University of Massachusetts Lowell, said via email that a company I work with used to plan execution only for emergencies without thinking too much about preparedness for successors.
While an emergency plan is helpful, it is important to take a more proactive approach in naming heirs annually and developing them regularly as well as those who can succeed them, she advised.
Some companies don’t even tell the heirs that they are the heirs, which may lead to people not seeing career growth. When a high-level executive dies suddenly, it makes the practice even more valuable. To backfill the role, it puts pressure on HR and senior leaders to quickly fill the role, Rimasha said.
Expect the unexpected
It is extremely important that organizations understand that situations may occur where a key executive may pass away unexpectedly even if they are in good health today. If the coronavirus has taught us anything, it is to expect the unexpected. The time to plan a crisis is before the crisis strikes, Charity Lacey, a communications expert and vice president of Gregory FCA, said via email.
For organizations that don’t have a succession process in place and the loss of a key team member immediately involving your communications team is of paramount importance. Understanding which outside partners should be educated when and how is their center skill.
This may include internal team partner vendors, client investors or other financial stakeholders, analysts and the media. Which audiences need to know quicker than others and ensuring that information is shared in a timely manner while respecting the wishes of the family should be the first steps in developing the program completed by Lacey.
No good reason
There is no good reason to justify a general oversight of not doing a business succession plan. Some business chiefs are too up to speed in the difficulties of the present. According to Deloitte, some people have an unconscious hatred of the reality that they will not last forever or believe that succession will work naturally on its own.
Others are aware of the real complexity of the task and find it overwhelming. However, the reasons why people avoid succession planning are not as important as the reasons they should be stated by the company.