Boards Urged To Embrace Transparency As Executive Resignations Face Greater Scrutiny

Jennifer Stein, managing director at GGi Communications, outlines practical guidance for boards navigating executive departures. (Image supplied.)

Spar CEO Angelo Swartz’s resignation letter is refreshing for its candour and transparency. Currency News captured it well:

“Then, in a move that is as remarkable as it is rare for a top executive, he takes responsibility for the lack of progress on the recovery front.”

It’s a departure from the familiar phrase that an executive is resigning to “spend more time with family.”

This PR safe explanation protects reputations and helps keep markets calm, particularly in listed companies where wording can influence investor confidence and regulatory scrutiny.

Sometimes it is true, but it’s rarely the whole truth. When resignations follow poor results, governance tension or strategic shifts, stakeholders reasonably suspect more beneath the surface.

What it often signals is board pressure, strategic misalignment, performance concerns, succession acceleration or a pre negotiated exit.

Executive departures are as much about managed messaging as they are about leadership change.

When companies default to the family trope, stakeholders assume spin.

The goal is credible transparency, and there are ways to handle departures without fuelling cynicism while still protecting confidentiality:

1. Drop the vague language

Vague language fuels suspicion. Instead of: “John has decided to pursue personal interests”, use something more concrete, which signals that the decision is strategic, not secretive:

“The board and CEO have agreed that the company now requires a different leadership profile as we enter a capital-intensive expansion phase.”

“Following the completion of the successful three-year turnaround strategy, the CEO will step down.”

2. Tie the exit to strategy

If the departure connects to a strategy shift, say so.

• Transition from founder-led governance
• Moving from growth phase to consolidation
• Digital transformation requiring different expertise
• Completion of M&A integration

When the rationale aligns with business direction, the market interprets it as evolution rather than theatre.

3. Praise with precision

A balanced tone works well as excessive praise can read like damage control. Recognise measurable achievements, reference tenure and avoid flattering superlatives that can feel defensive.

4. Signal stability immediately

Cynicism increases when uncertainty lingers and markets fear vacuums more than departures. Announce an interim successor simultaneously, confirm continuity of strategy (if applicable) and clarify the governance process for permanent replacement.

5. Align the message everywhere

If you don’t want credibility to collapse, ensure that the board briefs leadership teams before public release, align internal and external messages, prepare managers with talking points, anticipate likely media angles and ensure parallel timing on all announcements.

6. Retire the family excuse

Authenticity matters. If an executive genuinely retires due to health or family priorities, state it respectfully and clearly.

7. Let the board lead

When the chairperson frames the departure, it signals governance oversight and reinforces that this is a board-led decision. For listed entities in particular, governance credibility carries weight with institutional investors.

Context is everything

The same wording means different things depending on recent performance, activist shareholder activity, regulatory scrutiny, failed deals or scandals. Stakeholders interpret announcements through context, not just phrasing.

Credible transparency balances the protection of confidentiality – there is no disclosure of sensitive personnel matters or defamation risk.

It maintains market stability via clear messaging relating to succession and strategic continuity, and most importantly, it preserves trust.