TheCorporateCounsel.net

Speaking of CEO turnover, formal succession planning is becoming more common, according to a recent report from Russell Reynolds. Although this can be a sensitive topic to raise with CEOs, the report points out that normalizing the process not only benefits the company – it also helps the CEOs leave on better terms. Here’s an excerpt:

Last year told a hugely positive story around succession planning, with 22% of all CEO departures occurring because of a planned succession process—a 13% increase year-on-year, and the highest level ever recorded. This growing emphasis on succession planning contributed to fewer CEO removals, with the figure dropping to 14%, a significant decrease from 27% in 2023 and the lowest level since records began in 2018.

The focus on succession planning also led to a record number of internal promotions in 2024 – with 73% of incoming CEOs being promoted from within the organization. This reflects well on the Board because it shows that directors are mindful of developing an internal talent pipeline.

Meaghan also shared Recently on the Mentor Blog that more GC roles are being filled by internal candidates – so succession planning improvements may be going beyond the CEO.

For more real-time data on CEO turnover, check out Russell Reynolds’ “Global CEO Turnover Index” – which shows that the number of CEO departures in 2024 was well above average. Visit our “CEO Succession” Practice Area for checklists and resources for managing the process.

– Liz Dunshee