Margot McShane co-leads the Board & CEO Advisory practice, and Hetty Pye is a senior member of the Board & CEO Advisory practice at Russell Reynolds Associates. This post is based on a Russell Reynolds memorandum by Ms. McShane, Ms. Pye, Alix Pollack, and Leah Christianson.
Why traditional CEO succession planning is falling short
CEO succession and selection is arguably the most consequential decision a board will make. More than any other leadership decision, it determines who will shape the enterprise’s strategy, culture, credibility with investors, and enduring performance. Yet in many organizations, CEO succession is narrow, rushed, and ultimately holds little connection to the future of the business. Too often, succession is treated as a discrete event rather than the sustained leadership imperative it has become, with only 8% of boards planning more than five years in advance of CEO succession.
Simultaneously, the context around the CEO role has changed dramatically. Markets are more volatile. Transformation is the new normal. Stakeholder expectations are broader, louder, and less forgiving. At the same time, the CEO role itself has expanded in scope and complexity. The demands of enterprise leadership now extend well beyond operating performance. CEOs are expected to lead through disruption, manage competing stakeholder pressures, set direction amid ambiguity, and sustain trust under intense scrutiny. Perhaps unsurprisingly, as demands on the role grow, average CEO tenure has dropped to 7.1 years, acutely short tenures of just 30 to 36 months are increasingly common (up 79% year over year), and for those not yet in seat, interest in the CEO role is declining.
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