What went wrong at AMD

January 14, 2011: 5:00 AM ET

The AMD board's ouster of CEO Dirk Meyer on Monday caught many by surprise and highlights the need for better succession planning and communication between CEOs and their boards.

By Eleanor Bloxham, contributor

Surprises. CEOs don't like them from their CFOs, boards don't like them from their CEOs, and shareholders don't like them from boards. But, all too often, boards deliver them.

Dirk Meyer, Former CEO of AMD

The board at chip maker Advanced Micro Devices (AMD) ousted Dirk Meyer, its CEO, on Monday*, a surprise to investors and not a welcome one to many commentators as it had looked as if AMD might be getting on the right track and pulling out of a slump.

AMD spokesperson Drew Prairie says the need for new leadership stemmed from a desire to "accelerate company capabilities." "It's the long term trajectory we are trying to shift. There is strong faith by the board that our CFO can guide us forward while the CEO search is conducted," Prairie says.

Corporate boards are responsible for assessing whether they have the right CEO, not only for the moment, but also for the long term. How can they uphold this responsibility with fewer upheavals? Is there a way for boards to minimize tensions and create smoother transitions? More

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