Seven Myths of CEO Succession

Email     |     Share  
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9
Next Seven Myths of CEO Succession-5 Next

Myth #4: Succession is primarily a "risk management" issue. "While a failure to plan adequately certainly exposes an organization to downside risk, boards should understand that succession planning is primarily about 'building' shareholder value," says Mr. Miles. "Succession planning is as much success-oriented as it is risk-oriented."

The CEO's departure is, sooner or later, inevitable – but are companies prepared for it?

With CEOs turning over at a rate of 10 to 15 percent per year – from jumping to another firm to resigning due to poor health or poor performance, or just retiring – companies would be expected to be well-prepared for CEO succession. But governance experts from Stanford and The Miles Group have found a number of broad misunderstandings about CEO transitions and how ready the board is for this major change.

In their recent piece for the Stanford Closer Look Series, David Larcker and Brian Tayan of the Corporate Governance Research Initiative at the Stanford Graduate School of Business and Stephen Miles of The Miles Group name seven myths around CEO succession – myths shared by corporate boards as well as the larger business community.

"The selection of the CEO is the single most important decision a board of directors can make," say the authors, but turmoil around these decisions at the top "have called into question the reliability of the process that companies use to identify and develop future leaders."

 

Related Topics : A Big Market for Big Data Jobs, Midmarket CIO, IT Management Automation, SharePoint, Technology Markets

 
More Slideshows

IT security skills 7 Top Skills for Security Pros

Executives at several top tech firms outline the skills they need now and in the near future, including IaaS and IoT security expertise. Other skills listed may surprise you. ...  More >>

142x105itbeusasecurity2.jpg 9 Predictions for Cybersecurity’s Role in Government and Politics in 2017

Experts predict how cybersecurity will affect and involve our government, policies and politics in 2017. ...  More >>

Five9RemoteEmployees0x 5 Best Practices to Enable Remote Workers

Recent years have seen a significant increase in the remote workforce as developments in technology have given employees the freedom to work anywhere, anytime. ...  More >>

Subscribe to our Newsletters

Sign up now and get the best business technology insights direct to your inbox.