Succeeding at Succession

Many boards aren’t fully prepared for CEO departures despite succession planning being one of their primary responsibilities. Yet this is a responsibility boards can’t afford to get wrong—without the right person at the top, even the best companies with the most innovative strategies will struggle. This panel discussion provided insights into one of a corporate board’s most critical responsibilities—CEO succession planning. The conversation emphasized the importance of a deliberate and strategic approach to ensure effective leadership transitions, highlighting lessons from the panelists’ extensive experiences. What follows is a synopsis of this lively discussion.

Key Importance of CEO Succession Planning

The panel underscored that ensuring an effective CEO is a board’s most significant duty. As Jeff Miller noted, the board’s primary task is hiring and transitioning CEOs, as failure in this area undermines all other governance responsibilities. Ravi Saligram stressed that CEO succession planning should begin the moment a new CEO is appointed, highlighting it is an ongoing process rather than a one-time event.

Planned Versus Emergency Successions

The panel distinguished between planned and emergency CEO successions. Planned successions allow for a comprehensive assessment of internal and external candidates and align with long-term strategic goals. Emergency successions, however, require readiness to act decisively and rely more heavily on existing talent pipelines. Boards must consistently evaluate the company’s leadership bench to prepare for either scenario.

Critical Aspects of Succession Planning

Ravi outlined key principles, including the necessity of beginning succession planning early and prioritizing internal development. Both Ravi and Jeff emphasized the need for alignment among board members on the desired attributes and skills of the next CEO. Jeff highlighted the importance of defining who within the board will lead the process, whether it is the lead independent director, board chair, or a designated committee.

Internal Versus External Candidates

The discussion explored the merits of internal versus external CEO candidates. Although internal successors provide continuity and are often better attuned to the company’s culture, external candidates can bring fresh perspectives, particularly in turnaround scenarios. Ravi shared an example from Church & Dwight, where the board evaluated external candidates but ultimately selected an internal leader after ensuring robust comparison and due diligence.

Challenges in Transition and Retention

The panel discussed the delicate nature of transitions, particularly in retaining executives who were not selected as CEO. Open communication and honesty about development gaps or decisions can mitigate retention risks. Ravi emphasized the importance of humility and inclusiveness in external hires to maintain morale and cohesion within the leadership team.

Board Involvement in Talent Development

Both Ravi and Jeff advocated for boards to play a broader role in leadership development beyond the CEO. By actively engaging with the C-suite and establishing clear succession plans, boards can enhance organizational resilience. Jeff shared that at ServiceNow, leadership reviews are conducted twice annually, ensuring continuous evaluations and development of potential successors at multiple levels.

Role of Outgoing CEOs

The panel agreed that outgoing CEOs play a pivotal role in legitimizing their successors and facilitating smooth transitions. Ravi emphasized the value of outgoing CEOs supporting the incoming leader through introductions to key stakeholders and guidance during the initial months. Jeff also advocated for a defined end to the outgoing CEO’s involvement—such as serving on the board for no more than a year—to ensure the new CEO has the space to lead independently.

Conclusion and Best Practices

The panel concluded with actionable insights: ensure alignment among board members early, treat long-term talent development as an integral part of succession planning, and maintain transparency with internal candidates. Both panelists highlighted the importance of process discipline and the board’s ultimate accountability for CEO succession decisions.

The discussion illuminates that effective succession planning is not merely about replacing a CEO but ensuring continuity, cultural alignment, and readiness for future challenges. The panel left attendees with practical tips to elevate their approaches to CEO succession planning, emphasizing its strategic importance to organizational success.

To initiate a conversation about your succession planning, reach out to Deb Rubin.