Managing CEO succession: new models for a new era

Abstract

External pressures have changed the context within which CEOs are succeeded. At the same time, chairmen are clear that this responsibility is personal to them and are increasingly changing the nature of the process. Two new models of CEO succession are identified: one where the Board actively partners with the incumbent CEO and the other – a crisis model – where the Chairman and the Board assure the active management of the succession process. In both cases, best practice is for the Board to develop its own assessment criteria. A 'best practice' profile is suggested. Good assessment processes then focus on understanding the candidate, identifying data gaps, looking at evidence of predicted future performance and identifying development priorities. The final stage of the process is transition planning. A process for CEO succession is proposed and a number of principles for effective succession are put forward.