Sample CEO Succession Process

In brief: This sample CEO succession process originally appeared in NACD’s 2014 publication Success at the Top: CEO Evaluation and Succession.

The template includes a sample executive evaluation form and rating scale for assessing internal CEO candidates. 

This resource can help your board to

• Determine criteria or qualifications for the CEO’s successor.

• Identify possible candidates for succession.

• Access the capability and potential of possible successors.

• Create development action plans for potential candidates.

• Review the progress of potential candidates.

Most relevant audiences: CEOs, nominating and governance committee members, and compensation committee members

The focus on the board’s compensation committee has never been sharper. The components of compensation plans and the link between compensation and company performance are under intense scrutiny from shareholders, employees, policymakers, the media, and other stakeholders. The Report of the NACD Blue Ribbon Commission on the Compensation Committee revisits NACD’s 2003 Report of the NACD Blue Ribbon Commission on Executive Compensation to highlight the new environment in which compensation committees—and, more broadly, boards—are now operating. It recommends that the compensation committee and board work together to establish an executive compensation philosophy that supports the company in creating long-term, sustainable value.

The report includes ten specific recommendations for compensation committees to consider when evaluating their compensation philosophies. It also provides practical tools, such as sample compensation committee charters, a compensation committee assessment, and guidance on executive employment contracts.