Knowledge Center: Publication
Chief Executive Officer & Board of Directors
When looking inside for your next CEO12/4/2013 Jeffrey S. Sanders
An overwhelming majority of boards select an internal candidate as their next CEO. Over 80% of the Fortune 1000 companies who named a new chief executive last year promoted a successor from within the company (Heidrick & Struggles F1000 CEO Turnover Data). The National Association of Corporate Directors found in its 2013-2014 NACD Public Company Governance Survey that executive talent management and leadership development ranked fifth in priority of governance issues for directors, up from 13th and 12th place in 2008 and 2009, respectively.
However, when the time comes to select a CEO successor, a striking irony often hangs over board deliberations. As the date of a planned succession approaches, or when an unplanned succession is triggered, directors may find that they are better informed about the qualifications of external successor candidates than they are about the viability of executives who have been running their company. In addition, if the planned succession is sufficiently far in the future, directors are often not aware of the full roster of insiders worth watching over the long term.