Nvidia’s leadership crisis exposes the cost of a flat structure

Huang, who co-founded Nvidia at a Denny’s restaurant in the early 1990s, said a flat structure helped keep information “fluid” and empowered employees. But leadership consultants told Business Insider that a small number of management layers can leave a company with few prepared successors. “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 RHR International.

Nvidia has not publicly disclosed a succession plan. Its decision to install an interim CEO while searching among internal and external candidates suggests there may not have been an obvious successor ready, Astorino said. Nvidia did not respond to Business Insider’s request for comment. Huang resigned as CEO, president and board member amid reports of multiple extramarital affairs and a board investigation into concerns that he may have been the subject of a foreign intelligence effort.

Astorino described Huang’s stature as creating “key-person risk,” particularly given Nvidia’s central role in the AI ecosystem. Dan Kaplan of consulting firm ZRG said founder-led companies can struggle to prepare for leadership change. A flat organization may improve speed, he said, but “it’s not great for developing leaders.” A 2025 Nasdaq survey of about 700 board members, CEOs, executives and governance professionals found that 21% said their boards had no CEO succession plan; another 16% had only an emergency plan.

Bradley Akubuiro of Bully Pulpit International said boards can reduce dependence on a founder by strengthening oversight and keeping succession on the agenda. A credible plan, he said, must give prospective successors operating experience, board exposure and visibility with investors, customers and other stakeholders. Umesh Ramakrishnan of Kingsley Gate said companies often keep plans private because naming a successor can make the incumbent a lame duck and spur internal jockeying. He recommended preparing two or three serious internal candidates well before a crisis.

Lior Prosor of Deep33 said Nvidia’s stock performance had helped keep employees at the company, but the leadership upheaval and a decline in shares could give rivals an opening to recruit talent. Gartner analyst Alexander Kirss said the episode is a reminder that “No employee is irreplaceable,” including the CEO.