Succession Is the Top Responsibility of a Board—Yet Many Avoid It

It came as a bit of a shock. I was only 43 years old, so retirement wasn’t on my radar, and I had only been in the CEO position for two months. Succession planning seemed premature.

The lead director explained the rationale: “We unanimously approved you as the CEO, Harry. But we’re not going to sit around, waiting to be surprised if something should happen to you. We need to know that there are two or three people in the company who could succeed you, and we want to know about the development plans for those people.”

It’s the No. 1 responsibility of any board of directors: leadership succession. Even if the current CEO is doing a great job, the board needs to ensure that there is a plan in place should the unexpected happen—the euphemistic “getting hit by a bus” scenario.

In a recent survey of more than 200 directors of public companies in the U.S., 34 percent described succession planning for the CEO and other C-suite executives as a “top priority for 2025”—ahead of AI strategies (25 percent) and geopolitical risks (10 percent). Yet, despite the importance of this issue, boards can sometimes sidestep discussions or provide only cursory oversight of the CEO succession process.

One possible reason succession planning does not get the board’s full attention is that sitting CEOs are often reluctant to discuss it. As a result, succession planning can easily be deferred to another time.

Based on my personal experiences as a board member, as well as presentations I’ve made to organizations such as the National Association of Corporate Directors, I see three contributing factors that can stall or even undermine CEO succession planning. Here are three reasons CEO succession planning gets sidelined.

1. The CEO Lacks True Self-Confidence.

True self-confidence—one of my four principles of values-based leadership—is essential for any leader. By knowing your strengths and acknowledging your weaknesses, you surround yourself with a strong team of people whose talents and skill sets are complementary to yours. However, a CEO who lacks true self-confidence may resist giving the board too much visibility and access to potential successors.

As I observed in my previous article on board dysfunction and what to do about it, setting clear expectations supports good governance. One of the expectations is that the CEO will develop people in the organization so that there is a pipeline of leaders being developed for top roles. With that expectation understood by all parties, failure by the CEO to develop leadership candidates could have significant consequences, from the reduction in their bonus to even the loss of their job.

2. The CEO Believes They Are Irreplaceable.

This is the opposite scenario: a CEO who is self-confident to the point of bravado. With an attitude of “nobody could possibly replace me,” this type of CEO doesn’t see the point of succession planning other than a “check the box” exercise. This is a recipe for a failed succession.

A case in point: Disney CEO Bob Iger has been criticized for his handling of succession. First, Iger was supposed to leave Disney in 2011, but his term was extended several times—until he left the CEO role in February 2020 and was succeeded by Bob Chapek. But Iger, who assumed the role of executive chairman, and Chapek, whom he had supposedly picked to succeed him, clashed. In late 2022, Chapek left Disney, and Iger was brought back in again as CEO. That term was supposed to end in 2024 but is now being extended to 2026.

Now, with Iger set to leave again, there are some indications that succession will be different this time. For one thing, the board appears to be more in charge of the succession process.

3. The Board Is Asleep at the Switch.

The company is doing well, and there’s a good CEO in place. Why worry about succession right now? The reason is simple: the unexpected and even the unthinkable can happen. Being prepared for such an event is the mark of exemplary governance. Consider McDonald’s Corp., which has long been admired for its leadership development. This strength enabled the company to endure two unexpected CEO successions: when James Cantalupo died suddenly of a heart attack and, six months later, when his successor Charles Bell resigned due to terminal illness. Losing two CEOs in one year under such circumstances is unimaginable, and yet that is exactly what faced this Fortune 500 company. Fortunately, a strong candidate was prepared to step in: James Skinner, a long-time company employee who held the CEO role for nearly eight years.

Surviving what could have been a leadership crisis, and even thriving amid such upheaval, did not just happen. As a Korn Ferry case study on McDonald’s observed: “The succession pipeline that produced Skinner had begun to be reconfigured six years earlier. The catalyst for change was a mandate from the board … [with] a succession plan that would identify two successors for each key spot — ‘one ready now, one ready future.’ The future candidate was to be ready within two years.”

How Succession Candidate Visibility Has Changed

The good news for organizations today is the greater visibility of CEO succession candidates in front of the board of directors. Over the past two decades, an increasing number of boards have become more vocal about wanting to interact with company executives being groomed as possible CEO succession candidates. For example, these executives might be invited to the dinner preceding the quarterly board meeting or to participate in some of the board-meeting discussions.

This is a significant change from the past, when the CEO might ask one or two of these executives to make a brief presentation, no more than 30 minutes in length, at the quarterly board meeting. After that, these executives were neither seen nor heard from.

Today, greater visibility with the board is helping to facilitate overall leadership development at the company. For example, in addition to managing CEO succession, boards also want to know more about how executives within the company are being groomed to take over key roles such as chief financial officer, chief marketing officer, and chief human resources officer. With greater breadth and depth across leadership development and succession planning, the board can help ensure that the company has the right people in the leadership pipeline. And that is good news for all involved.

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This article originally appeared in Forbes.