Exelon, one of the nation’s largest energy companies, recently transitioned to a new CEO when Calvin Butler took over for Chris Crane who retired after serving as the company’s CEO and a member of its board of directors since 2012. With his appointment, Butler becomes the first African American to hold the top job at Exelon. His appointment also brings the number of Black CEOs running a Fortune 500 company to seven.
There are three positive things corporate board members can take away from the way Exelon’s board handled their CEO’s succession:
• Exelon selected an internal candidate. Providing opportunities for internal candidates to run significant operations within the company is an excellent way to determine if potential successors can handle being elevated to CEO. Companies often talk about doing this but often fail to make it happen. Selecting internal candidates can be critically important for companies because it almost always ensures that the company culture and values will be respected and maintained by the successor CEO. In general, the new CEO will be aware of the company’s strengths and weaknesses and should be in position to quickly and seamlessly build on the success of his predecessor. If handled without bias or favoritism, selecting an internal candidate can also boost company morale because employees will feel that if they work hard and perform, they can advance to the highest leadership roles of the company.
• Exelon has a succession process that allowed an internal candidate to be well prepared to run the company. Calvin Butler is an internal candidate who emerged as a potential CEO successor after working at the company since 2008. Working at Exelon for 14 years allowed him to learn many different aspects of the company by serving in multiple leadership roles, including as Exelon Utilities CEO and CEO of Baltimore Gas and Electric (one of Exelon’s operating companies). He also has held positions as senior vice president for regulatory and external affairs for GBE, and senior vice president of corporate affairs and vice president of governmental and legislative affairs for ComEd (another Exelon operating company). Butler was able to gain broad experience in multiple areas and then demonstrate leadership skills in a critical role for the company while working with Crane during his years as CEO to advance the company’s business strategy.
These real opportunities to manage high-value assets of a company make a major difference in the quality of executives a company can produce. Exelon’s board no doubt monitored Butler’s progress in his roles at the company and ultimately identified him as a top candidate for promotion to CEO.
Butler was promoted to Exelon COO in October of 2021 and then was named president and COO in October 2022 just prior to Crane announcing his retirement because of health concerns. Crane passed his responsibilities over to Butler during the last months of 2022 and Butler officially became CEO in January.
• Upon being elevated to CEO Butler gave up an appointment to an external board. It is a good idea for boards to dissuade their CEOs from taking on too many external board appointments. The ever-evolving nature of ESG compliance makes serving on a corporate board more challenging than ever and determining the primary ESG concerns for one board is a tremendously complex undertaking, let alone for two or three.
On becoming Exelon CEO, Butler stepped down from his board position with M&T Bank. This ensures that he can focus on his new responsibilities and is not overloaded with work from outside companies. Butler currently serves on Exelon’s board and also serves as board chair at each of Exelon’s six operating companies. He will retain a seat on the board of RLI Corp. By avoiding over-extending himself with responsibilities on external boards, Butler can focus on keeping his company productive during a possible recession.