CEOs who become all too dominant can sometimes cause more harm than good and Ted Kunkel’s poor treatment of successor Terry Davis at Foster’s is a good example of how a boards should keep big egos in check.

Terry Davis was the man slated to succeed Ted and he was doing a terrific job running the wine division. Now Terry didn’t need to work as he picked up $10 million in the Cellarmaster takeover but he’s pretty ambitious and a fine executive.

Anyway, a few months back Coca Cola Amatil sounded him out to take the big job as CEO so Terry went to Kunkel so try and sort out some sort of succession program.

Kunkel’s response was to tell him to get stuffed and not tell the board. Bad move, Ted.

A little while later the board got wind of what happened and moved to put in place a succession process but by this time Terry had signed on the bottom line with Coca Cola Amatil and was lost to Foster’s.

Kunkel is rated highly by the market but Crikey has always been struck by his arrogance at press conferences and AGMs. He’s one of these blokes who has always got to have the biggest and best of everything.

Kunkel’s legacy at Foster’s includes losing $300 million in China, slimming down the brewery to Australia, diving into the immoral pokies business and creating the wine division.

The reality is that it was first Ray King and secondly Terry Davis who did all the hard yards on wine and executives have not been able to blossom and bloom around the all-dominating Ted.

For instance, Keith Lambert was once head of strategy at Foster’s but now he is off running the combined Southcorp/Rosemount operation which has produced much better returns that the Foster’s wine division.

Kunkel must surely be reaching the end of his tether as Foster’s and has now been allowed to join the Billabong board which will allow for regular trips to visit his parents in Brisbane.

But with Ted thinking about life after Foster’s, who is going to replace him in the top job? Boards need to be very wary of dominant CEOs with huge egos and the succession planning stuff-up at Foster’s is also a big black against the board, led by chairman Frank Swan.

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