Product and service lifecycles are accelerating, new technologies are disrupting business models at an unprecedented pace, and markets are growing more volatile and interdependent, with government intervention adding to the unpredictability.
These ongoing shifts in the global commercial climate are heightening the challenges facing CEOs. What does this mean for boards overseeing CEO succession?
Dynamic challenges demand dynamic CEO succession plans. In practice, this means formally reviewing the success profile for the next CEO annually against anticipated challenges, following the strategic planning process. Once the board pressure tests the strategy, a distinct session should be held to determine how the CEO success profile might need revision in light of any strategic change.
Succession Planning in a Dynamic Reality: Three Key Factors
The competencies a CEO needs keep shifting with the challenges they face. When the greatest certainty is unpredictability, boards should approach succession with three factors in mind: past success still matters, but it needs closer scrutiny; broad-gauged candidates offer a logical hedge; and future potential, however hard it is to measure, belongs in the equation.
- Past success: What did they do, and how? Past success remains an indicator of future success, but it needs to be evaluated through the lens of adaptability. Boards must dig deeper into an executive’s track record to understand what they actually contributed to the results and how their approach evolved as conditions changed. Did they refine their playbook successfully? Success achieved with a static playbook may not predict how they’ll perform as new challenges arise.
- Breadth of experience: Where have they proven themselves? Success across a range of environments offers stronger evidence of adaptability than success in one. The broadest-gauged candidates have faced a wide variety of challenges and, in the process, built different strengths and strategies that they can draw on when the next one inevitably arrives.
- Future potential: What haven’t they shown yet? More unpredictable challenges have made past performance a less reliable predictor of success. They have also made potential a more important factor. Because potential is inherently difficult to assess, boards should weigh it alongside past performance to identify underlying capacities, such as consistent patterns in how an executive handles unfamiliar situations.
The Internal Succession Option
Assessing potential is difficult, but boards don’t have to wait until a successor is needed to start, and in the interest of organizational stability, they are advised not to. The most practical place to begin is with executives who are already inside the organization. It is within a board’s scope to charge the incumbent CEO with actively developing direct reports into high-potential candidates for succession and creating the conditions for assessing how those executives perform.
That starts with board members simply seeing them more often, in both structured and unstructured settings. CEOs should give these executives opportunities to present to the board, and have them attend board functions on a regular basis. Board members should also meet quarterly, with and without the CEO, to discuss potential internal candidates and how their professional development might progress.
During my tenure as Chair of Boyden, all of the CEO’s direct reports presented at board meetings and attended portions of our retreats. This allows the board to observe and pressure test their leadership skills, particularly how they responded to challenges and adapted to unfamiliar situations. We maximized these opportunities by scripting board member interactions with them during their presentations.
Preparing for Future Leadership: Who Is Responsible
Preparing for the organization’s future leadership requirements, specifically through CEO succession planning and ultimately selection, is one of the board’s chief responsibilities. It includes holding the incumbent CEO accountable for successor development. This can be formalized as a material component of the CEO’s annual goals and performance plan, just as it is for the CEO’s direct reports within their own teams.
The board, the incumbent CEO, and potential successors all need to recognize that the role is ever evolving. This recognition is critical to selecting the next CEO and to developing the leadership skills needed to step into that role. Preparing internal candidates pays off only if organizations acknowledge that the future may require new skills and approaches, and that adaptability is non-negotiable.
In 2026, Boyden marks 80 years globally. With roots in the U.S., we reflect on the experience and insight that have shaped our work—while looking ahead to how leadership continues to evolve and what it will require of organizations and those who lead them.
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