Nvidia's CEO exit exposes the succession gap in flat org charts

Jensen Huang ran Nvidia with as many as 60 direct reports. On Wednesday, he resigned as CEO, president, and board member — and the company he shaped had no publicly disclosed plan for who would replace him.

The resignation, amid reports of multiple extramarital affairs and a board investigation into concerns that Huang may have been the subject of a foreign intelligence effort, forced Nvidia to name CFO Colette Kress interim CEO while it searches internal and external candidates for a permanent leader. For HR and governance leaders, the episode is a live case study in what happens when speed-optimized structures meet an unplanned transition.

What did the flat structure actually cost?

Huang cofounded the chipmaker at a Denny's restaurant in the early 1990s and deliberately kept the top of the org chart thin. He credited the arrangement with keeping information "fluid" and employees empowered.

That design has a known defect. "It's hard to imagine any of those direct reports are able to get the scale, scope, and experience to even be qualified to be the CEO," said David Astorino, a senior partner at leadership consulting firm RHR International. He noted that appointing an interim CEO while launching an open search suggests Nvidia had no obvious candidate ready behind the scenes.

Dan Kaplan, managing partner and head of the HR practice at consulting firm ZRG, put it more bluntly: "When you have a flat organization like this, it's great for speed. It's not great for developing leaders."

Astorino described Huang's outsize status as "key-person risk" — too much control resting with a single executive — a condition especially acute at Nvidia given its central position in the AI ecosystem.

How common is the planning gap?

More common than boards admit. A 2025 Nasdaq survey of roughly 700 board members, CEOs, executives, and governance professionals found:

• 21% said their boards had no CEO succession plan at all
• Another 16% said they had only an emergency plan in place

Kaplan added a founder-specific wrinkle: founders are conditioned to dismiss doubters after years of being told their ideas would fail. "They're not great at hearing no," he said. "They develop the thickest skin possible." That resilience, useful in the early years, becomes a barrier when boards try to plan for a future without the founder.

What should boards do differently?

The observers Business Insider spoke with converged on several moves, most of them quiet.

Bradley Akubuiro, a partner at Bully Pulpit International and former Fortune 50 chief spokesperson, said founders' identities often become tied to the organization's success, and boards should add an independent director, lead director, or chair to keep succession on the governance agenda. Continuity planning matters beyond misconduct scenarios, he said: "It isn't always going to be misconduct. Any number of things could happen."

A real plan exceeds a name on an org chart, Akubuiro added. Successors need substantial operational experience, board exposure, and visibility with investors, customers, and other stakeholders.

Umesh Ramakrishnan, cofounder and chief strategy officer at executive search firm Kingsley Gate, explained why companies keep this work silent: publicly naming a successor can turn the sitting CEO into a lame duck, prompt passed-over contenders to resign, and invite jockeying around the heir apparent. "The organization starts gravitating toward the successor because they know that's where the power center is going to be," he said. His prescription: cultivate two or three serious internal candidates well before a crisis, give them real operating responsibility, and create incentives to stay through the transition.

Does the turmoil threaten retention?

Possibly. Lior Prosor, cofounder and managing partner at venture fund Deep33, called Nvidia a "super sticky organization" for years, partly because employees shared in the extraordinary stock run-up. With shares taking a hit since the affair reports, rivals may have a fresh opening to recruit its most valuable people.

"For the first time ever," employees may be asking, "How much will my equity be worth? How quickly does it come back?" Prosor said.

Alexander Kirss, a director analyst in Gartner's HR practice, offered the lesson for every company that has flattened its management layers: "No employee is irreplaceable. That includes the CEO."

Boards that treat succession as a boardroom formality rather than a running people process now have the most expensive cautionary tale in tech to study.