Illinois Tool Works: CEO Santi Was Excellent, but We Like the Succession Plan
Illinois Tool Works ITW announced the departure of CEO Scott Santi, effective Jan. 1, 2024. Santi will remain as board chair until March 1. The firm will certainly miss Santi, but we like the choice of Christopher O’Herlihy, and we’re not surprised by the announcement. More importantly, from a shareholder standpoint, ITW’s enterprise and 80/20 strategy is institutionalized, meaning its operating model isn’t based on one person, nor is it governed by top-down edicts. Quite the contrary, the businesses must apply the playbook, but how they choose to do so is done on a bottoms-up basis.
Given that O’Herlihy has been intimately involved with ITW’s strategy for a long time, we think the selection makes complete sense. The firm has a peculiar structure in that Santi’s successor was vice chair of the board, but we like this approach. O’Herlihy has also been with ITW since 1989 and moved into increasing areas of responsibility in the operating businesses to much success. He is more than prepared to take the reins from Santi, in our view.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.