Behind the scenes of Disney's succession planning led by James Gorman after Bob Iger

With Bob Iger’s contract ending at the end of this year, Disney is facing its biggest management crisis ever. Several years after his mysterious return four years ago, his departure is set to send shockwaves through the entire entertainment industry. To avoid repeating past failures and confusion during CEO transitions, Disney’s board has taken decisive action. That decision is to appoint James Gorman, former CEO of Morgan Stanley, as Chairman.

Gorman’s joining Disney is driven by the company’s true crisis. Amidst the turbulent entertainment industry, under pressure from activist investors, the stock price remains depressed. The board recognizes that they cannot afford another leadership failure.

Background on Bob Iger’s Contract Ending and Gorman’s Appointment

Since becoming Disney’s CEO in 2005, Bob Iger has led the company to the top of the industry through strategic acquisitions of Pixar, Marvel, and Lucasfilm. However, recent streaming wars and the rapid decline of traditional TV have repeatedly delayed his succession planning.

A year ago, Gorman, a 67-year-old Australian, became Disney’s chairman. During his 14-year tenure as CEO of Morgan Stanley, especially after the 2008 financial crisis, he rebuilt the firm and smoothly transitioned leadership in December 2024. Wharton School Dean Erica James praises him: “Few people can handle leadership transitions as smoothly as he does.”

Gorman’s choice of Disney is clear: to solve the company’s biggest challenges. Wall Street and investors are demanding strong leadership to navigate this difficult phase.

Lessons from Past Succession Failures: The Bob Chapek Case

At the end of 2021, Bob Iger announced his planned retirement. His successor, Bob Chapek, was appointed but was ousted in less than a year, forcing Iger to return unexpectedly for four more years.

Chapek’s failure was complex. He was promoted as CEO just as the COVID-19 pandemic began, causing Disney’s core businesses—cinemas and theme parks—to shut down temporarily. The board’s attempt to share authority with Iger created internal conflicts, leading to a lack of clear leadership. Political conflicts with Florida’s governor and increasing losses in streaming further fueled criticism of Chapek.

David Rooker, director of Stanford’s Institute for Corporate Governance, notes, “Disney’s succession process has been tumultuous and sometimes embarrassing for a large corporation.”

This failure symbolizes Disney’s overall leadership transition history. From Michael Eisner’s contentious departure in the 1980s to Tom Staggs’ failed tenure in 2015, Disney has repeatedly stumbled in leadership changes. Iger himself, despite appointing Staggs as COO, extended his own term and ultimately forced Staggs out.

Gorman’s Approach to Succession: Four Candidates and a New System

Learning from past mistakes, Disney’s board has established a dedicated succession committee, chaired by Gorman. Along with General Motors’ Mary Barra, Lululemon’s Calvin McDonald, and former Sky executives Jeremy Darlow, they are rigorously evaluating potential successors.

Four internal executives are vying for the top spot. The leading candidate is Josh D’Amaro, head of Disney Parks. A charismatic leader with 27 years at Disney, he has driven a $60 billion expansion plan and enjoys strong Wall Street support. Also considered is Dana Walden, head of Disney’s TV and streaming divisions. If chosen, she would be Disney’s first female CEO in its 102-year history. Other candidates include film studio head Alan Bergman and ESPN President Jimmy Pitaro.

The committee’s criteria are strict. They assess not only skills, resilience, and appeal to the public but also intangible qualities necessary to overcome current challenges. Industry watchers are focusing on these key issues:

• Transition from traditional TV to streaming platforms
• Establishing Disney+ as a top streaming service
• Responding to rapid advances in artificial intelligence
• Resilience to U.S. economic uncertainties
• Navigating an increasingly polarized political environment

Challenges and Expectations for the Next CEO

The next Disney leader will steer a company loved by millions and employing 230,000 people. The task is highly complex and multifaceted.

They must ensure profitability of Disney+, strengthen the value of film studios and major franchises, revitalize theme parks, and oversee the construction of a new resort in Abu Dhabi. Simultaneously, they need to leverage AI without compromising the value of Disney’s beloved characters.

Choosing one internal candidate may lead the other three to leave. When Chapek was appointed, Kevin Mayer, head of streaming, quickly resigned. The board is likely considering establishing co-presidents to prevent leadership gaps. Media analyst Robert Fishman from MoffettNathanson Research states, “Disney is at a turning point. It needs to demonstrate to investors that premium content, theme parks, and streaming strategies can generate significant returns.”

The Disney empire built over decades by Bob Iger is poised for revitalization under new leadership.

Applying the Proven Morgan Stanley Succession Model

Gorman plans to implement at Disney a succession model proven at Morgan Stanley. This involved a disciplined, multi-year process where candidates spent extensive time with directors, discussing complex management decisions.

When Morgan Stanley named Ted Pick as CEO in October 2023, the other two finalists were promoted to co-presidents with substantial retention bonuses. Disney’s board is expected to consider a similar approach.

Erica James explains, “Gorman approached succession with empathy. He understood that real people—shareholders, employees, and candidates—are involved.”

Gorman himself emphasizes the key to a successful transition: “It all starts with a simple question. Do you truly want to step down as a leader? I did, and that’s why my successor was able to succeed.”

Rapid Industry Changes and Expectations for the New CEO

When Bob Iger returned at the end of 2022, the entertainment industry had changed dramatically. Wall Street no longer valued investments in streaming audiences but focused on profitability and efficiency. Disney’s stock, which peaked around $200 in March 2021, has since traded near $111.20.

The new CEO must demonstrate leadership capable of responding to these fundamental industry shifts. Erica James notes, “There are major changes in the economy, geopolitics, and culture. Leaders face constant crises and find it increasingly difficult to establish a stable foundation.”

Iger’s succession is not just a personnel change but a reimagining of Disney’s future. Whether Gorman’s leadership process, guided by lessons from past failures, will bring greater transparency and execution remains crucial for Disney’s destiny.