Walt Disney takes mouse-sized governance step

Maybe James Gorman will sprinkle a little fairy dust on Walt Disney (DIS.N), opens new tab. The former chief executive of Morgan Stanley was tapped, opens new tab to chair the board, in what amounts to a mouse-sized step in the right direction for a $175 billion company with elephant-sized problems.

In the new year, Gorman will replace Mark Parker, Nike’s chair and former CEO, who has served on Disney’s board for nearly a decade. Given his long tenure, he is partly accountable for the dreadful succession, opens new tab process that led to Bob Iger’s return two years ago. The botched planning invited unwanted attention from pushy investors, including Nelson Peltz’s Trian Partners and created costly distractions as the entertainment conglomerate tries to make streaming services Hulu, Disney+ and ESPN+ financially viable.

Gorman provides a steady pair of hands. He also should be focused after ceding the Morgan Stanley chairmanship in January. So far, he deserves credit for managing a smooth leadership transition at the Wall Street titan, where Ted Pick was named CEO a year ago and the other two presumptive candidates have stuck around as co-presidents.

Disney also deserves a pat on the back for keeping the CEO and chair roles separate. Iger held both positions from 2012 to 2020, and Gorman did the same for even longer. It’s part of an encouraging trend, opens new tab. Last year, 40% of companies in the S&P 500 Index (.SPX), opens new tab did not split the job, down from 55% in 2013, according to executive search firm Spencer Stuart.

Given all the succession and strategic drama at Disney, Gorman will be drawing on all the skills he used to juggle the egos and blueprints at Morgan Stanley. Iger already has extended his contract multiple times and is supposed to depart, again, in December 2026. Disney said on Monday it plans to unveil the new CEO early that year. Among the insiders potentially in the running are Dana Walden and Alan Bergman, the co-heads of entertainment; James Pitaro, who runs sports network ESPN; and Josh D’Amaro, who oversees theme parks.

Iger struggled to prepare his deputies. His handpicked choice, Bob Chapek, lasted less than three years. Promising candidates Tom Staggs and Kevin Mayer both decamped. The danger, especially considering the languishing share price and valuation, is that Iger sticks around even longer. It’s now up to Gorman to ensure that Disney corrects course and finds a suitable big cheese.

CONTEXT NEWS
Walt Disney’s board of directors on Oct. 21 named James Gorman as board chair, effective Jan. 2, 2025. The former chief executive of Morgan Stanley replaces Mark Parker, the executive chair of Nike, who served on the board for nine years.

Disney said it plans to announce a new CEO in early 2026. Boss Bob Iger’s contract ends in December 2026. Reuters