COMMENT:

Based on the market reaction to Simon Moutter's resignation from Spark it's hard to describe this as a smooth transition.

A 3.5 per cent fall in a company's value is not something directors would want to see, given that CEO transition is one of the most important decisions made in the boardroom.

That's not to say there's anything wrong with the appointment of Jolie Hodson. By all accounts she is a fine choice to lead the telco into a challenging and dynamic new era.

Advertisement

It's the timing of Moutter's resignation that appears to have unsettled the market. Yes, he has given three-month's notice and yes, after seven years as managing director he could be expected to hand over the reins this year.

Read more:
Simon Moutter resigned, replaced in same evening
The top five challenges for new Spark boss Jolie Hodson

But as some analysts have pointed out, it does seem unusual that he isn't sticking around until after the Rugby World Cup with the focus on Spark Sport and the drive into sports content and streaming which Moutter championed.

Spark certainly wasted no time in announcing his replacement, an indication that the board has long had a rigid succession plan in place and may well have been expecting Moutter to step down.

Yet, perhaps the board could have primed the market better so it didn't seem so sudden.

Most companies tend to allow a longer lead in time and transition phase, even when confronted with such a crucial year ahead. Some even remind shareholders that the boss' tenure is coming to an end and the board has it covered when it does occur.

Air New Zealand, to take one example, took a full year to phase in a new CEO.

Spark has at least removed the uncertainty of who will lead the company.

Advertisement

Moutter, who departs on July 1, is a high-profile managing director who has had an excellent tenure at Spark.

So it's also a tad strange that under those circumstances he hasn't made himself available for media interviews.

It would have been an opportunity - not to hog the limelight - but to offer some insights and give final confidence to the strategic direction of the company.