1. Loss of control or influence. A CEO might be forced to sell or transfer a portion of his or her shares as part of equitable distribution, lump sum alimony or by agreement. Selling shares can reduce a CEO’s influence and impact decisions regarding corporate strategy, asset ownership, and board composition. Shareholder reaction to loss of control will vary.
2. Divorce impacts productivity, concentration, and energy levels. Divorce is stress. Generally, it is well known that employee divorces impact their productivity. In extreme cases, the distraction of divorce can lead to premature retirement.
3. Divorce can change appetite for risk. A sudden change in wealth – through loss of equity in the company they are running or other investments outside the firm -can alter an executive’s risk appetite, and impact decision making
Is divorce still a private matter? For most people it is. But if you are the CEO of a publicly traded company, perhaps in the future your divorce might be a matter which has to be disclosed to shareholders.The Stanford Graduate School of Business article can be read here.