Outlook and Challenges

Governance Challenges 2019: CEO Succession Planning

By NACD Staff

04/02/2019

Governance Outlook Report CEO Succession

In brief: Effective leadership development processes, including CEO succession, are one of the key legacies of high-performing chief executives—and one of the board’s most critical responsibilities. 

NACD produced the 2019 edition of Governance Challenges in collaboration with our five strategic-content partners—Heidrick & Struggles, the KPMG Board Leadership Center, Marsh & McLennan Companies, Pearl Meyer, and Sidley Austin LLP.  The publication will help directors ensure their CEO succession-planning processes stay fit for purpose in a dynamic environment characterized by shrinking CEO tenures, changing demographics of the rising CEO class, and an uptick in activist-investor challenges that seek a change in the CEO (and/or other officers).  

Boards can use this resource to:

  • benchmark their current succession-planning processes against private- and public-company practices;

  • prepare for activist campaigns that involve a proposed CEO change;

  • clarify the role of the lead director or independent chair in succession-planning activities;

  • integrate corporate culture considerations into CEO succession planning;

  • design and manage compensation plans relative to both planned and unplanned CEO changes; and

  • understand the board’s fiduciary duties related to CEO succession, including disclosures and considerations for shareholder communications

Most relevant audiences:  Board chairs/lead directors, CEOs, general counsels, compensation committee members, nominating and governance committee members

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