In one of the most dramatic reversals in corporate history, the Walt Disney Co. board reinstated Bob Iger as CEO in November, ousting his predecessor Bob Chapek.

The return of Iger, who had previously served as CEO for 15 years before Chapek took over, set off a flood of Wall Street investor notes focused on the challenges facing Iger — analysts and Hollywood industry observers also scrutinized Chapek's rocky tenure and his selection as CEO. 

Here's a rundown of what led to the change at the top of one of America's most beloved companies and the challenges that lie ahead for Iger in what was announced to be a two-year tenure, from finding a new successor to fixing Disney's streaming business and repairing the company's relationships with Hollywood.

What went wrong under Chapek and how Iger's return happened

Iger's return cut short the tenure of his protege Bob Chapek, who had spent less than three years in the role. Insider reported that Disney executives had complained to the company's board about Chapek's leadership.

Chapek's fumbles were wide-ranging. Disney had just reported a $1.5 billion loss in its streaming business on a November 8 earnings call. Earlier in the year, the company faced backlash from customers over price increases at its theme parks. Separately, employees walked out in protest over Disney's reluctance to take a strong stance against Florida's "Don't Say Gay" law. 

Chapek had also alienated creative execs and Hollywood by taking content budgets away from creative execs at Disney and by releasing movies on streaming at the same time as in theaters during the pandemic; the move resulted in a high-profile legal spat with Scarlett Johansson and her reps.

The company also faced pressure from activist investors like Daniel Loeb to cut costs and make big strategy changes. 

It didn't help that Chapek, while he was considered an effective operator, was also seen as less charismatic and communicative than his popular predecessor. Wall Street faulted him for waiting until after the 3Q earnings call to announce that layoffs were planned, for example.

Why Iger's top priority will be a solid succession plan

Iger's return reassured employees who were familiar with the Disney vet but also drew criticism, considering his previous remit as CEO included finding and grooming his replacement. So the pressure's on for him to carry through on that task before his two-year contract is up (though the board could always extend his contract again, considering it already did so four times before). 

During Chapek's first year as CEO, Iger remained as executive chairman of the company, and there were tensions between the two executives. The Wall Street Journal reported that Iger undermined Chapek's leadership.

While many in Hollywood cheered Iger's reinstatement, the move also quickly drew criticism from some on Wall Street over Disney's succession planning and questions about whether the company even has execs who could be groomed to succeed him in two years.

How Iger can strengthen Disney's streaming business and control costs

Iger returns to a streaming landscape that's more competitive since he left, with new entrants like Netflix's ad-supported tier fighting for viewers' share of wallet. Disney, which in December launched its own ad-supported Disney+ offering, has enjoyed strong streaming growth, but Wall Street cares more about profitability now. 

Iger previously scored wins for Disney with acquisitions of Lucasfilm, Pixar, and other companies but told Disney staffers at a November meeting not to expect more big acquisitions. He also said a hiring freeze announced by Chapek would remain in effect.

Stepping up to lead the company amid a tough economic environment, Iger will have to address not only steep losses in Disney's streaming business but also big decisions like whether to seek full ownership of Hulu, now part-owned by Comcast; how to manage content distribution across Hulu and Disney+; and whether to keep or sell ESPN. 

How a sluggish box office and talent demands will create new challenges for Iger

Iger wasted no time in making changes, ousting Kareem Daniel — the exec who led distribution under Chapek's unpopular business restructure — and announcing plans to give Disney creative executives more power.

But he also has to deal with a box office business that's been scarred by the pandemic and mollify Hollywood talent still miffed by some of Chapek's moves. Recent animation releases have flopped, and there's been a slowdown in Star Wars releases.

Long considered one of Hollywood's most successful CEOs, Iger will need to marshal all of his business acumen, cultural savvy, and management skills to usher Disney through a challenging economic landscape and transition the company to a strong new leader.