Fracas in Harley-Davidson's boardroom reminds all corporate committee members that succession planning is essential to maintain stability, long-term sustainability and business growth. When board members delay or fight to find future leaders for major companies, it can leave the company without instructions, be vigilant to shareholders and encourage activist investors to take action.
The motorcycle manufacturer's board was on the watch when Harley-Davidson CEO Jochen Zeitz informed the company that he was planning to retire in the final quarter of 2024. However, as of April 2025, the Harley-Davidson board is still in the process of identifying the next CEO. Recently, Harley-Davidson director Jared Doureville has resigned from the immediate resignation of Zeitz and two long-time board members, citing “cultural depletion, executive turnover and misorganisation of core brands.”
The connection between Doureville and H Partners Management (he serves as one of the principals) led to a private equity company that owns about 9.1% of Harley-Davidson shares, launching a campaign to win other shareholders to vote “withholding” to Zeitz and two other board members at the company's shareholders meeting in May.
As part of its efforts to expel CEOs and directors, Partner H said, “We are deeply concerned that there will be further disruption of the company's current strategic direction and significant shareholder value in order for the board to select a new permanent CEO, as is currently constructed.” H Partner has recorded a loss of 42.7% on the stock price over the past 12 months, including 24% since its launch in 2025, highlighting the decline in the company's performance.
Harley-Davidson rebutted by calling the H Partner's campaign “selfish” after the CEO candidate was rejected by the board. “H Partner has chosen to make its own profits by trying to disrupt the board's strict and thoughtful CEO transition process, putting it ahead of other shareholder interests and endangering Harley-Davidson's future and shareholder value.”
The prospect of a company running for several months without knowing who the next CEO is, calculated and whether they believe it is selfish or not, is bewildered by investors. Regularly updated succession plans require periodically updated succession plans, especially in current environments where performance for a year can lead to calls for CEO expulsion.
As the Harley-Davidson confusion unfolds, here are some observations on situations that will help other companies avoid this type of problem:
Leave the board disagreement at home. There should be a disagreement among the boards about who should be the next leader in any company. Unfortunately, the disagreement about Harley Davidson's CEO came into view when Coach Dourville resigned and released a poignant letter about what's going on with the company. When board members publicly criticize each other, almost everyone loses. Generally, board members lose their seats on the board, companies lose their share price value, shareholders lose their faith in the board, and the potential for loss of CEO lead ability and reputation for the company brand. If the board is able to make compromises between current members, it may be able to draw attention to issues that could force the board to force compromises with activist investors.
Make sure the process of replacing your CEO is thorough. Whenever leaders are replaced, perform the right due diligence and ensure that the right people are promoted to top job. However, it may take too long to trade CEOs and financial markets and shareholders may begin to question whether the board belongs to the task. Typically, CEOs are called to be replaced, and there are poor performance and mismanagement of crisis. In these situations, a quick solution is needed that will help get the company back on track. Dragging the CEO selection process creates uncertainty. The faster a new CEO is made, the more the company can begin to implement turnaround plans and recover from the crisis.
Consider making an annual succession plan review mandatory. If this is not yet a common practice for the board, consider it. The recent CEO's firing for poor performance, differences in strategic opinion and large shareholder conflicts make this practical. The recent threat of violence against corporate authorities has increased the risks required by businesses that require companies to intervene in the role of CEO interim in emergencies. A review of the annual succession plan is also a way to ensure that the board is focused on the company's future.
