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Business LibreTexts

5: CEO Selection and Succession Planning

  • Page ID
    22632
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    • 5.1: CEO Selection - A Key Board Responsibility
      Selecting a new chief executive arguably is a board’s most important responsibility. Yet, record CEO turnover points to distinct deficits in board performance in this area.
    • 5.2: Succession Planning is an Ongoing Process
      An effective succession-planning process does not end with the selection of a new CEO. The board must be ready to coach the candidate it chooses, especially in the first months, and it has to agree on how it will evaluate the CEO going forward. Unfortunately, this rarely happens. More than half of the boards surveyed say they have little or no formal process for evaluating the performance of their CEOs, despite the huge responsibility entrusted to them.
    • 5.3: CEO Turnover - Different Scenarios, Different Challenges
      The reasons for a CEO’s departure generally fall into one of four broad categories: (a) the CEO leaves to become the chief executive of another company; (b) the CEO retires or takes an extended leave of absence; (c) the board decides to replace the CEO with someone better suited for the current environment or for likely changes in strategy or market conditions; or (d) the company’s board fires a failing CEO.
    • 5.4: CEO Selection - Common Board Mistakes
      Many of the succession failures can be traced to a few common mistakes, all of which are exacerbated by a board’s lack of preparedness.
    • 5.5: Insider or Outsider?
    • 5.6: Grooming the Next CEO
    • 5.7: Succession Planning- Best Practices