When CEOs botch their exits, their successors and their companies suffer. According to Russell Reynolds, between 2003 and 2015 one in every seven CEO retirements in the S&P 500 was followed by the forced departure of the new CEO within the first three years, 85 percent of them due to low performance or forced by the board or activist investors.
Why the Best CEOs Are Already Thinking About Their Exits
Many CEOs avoid thinking about succession and may even sabotage the board’s efforts at planning for it. As a result succession is delayed, the next CEO arrives unprepared, or the ex-leader sticks around in the capacity of chair or senior advisor and continues to call the shots. Company performance deteriorates, while the new CEO receives a lot of criticism, steps down voluntarily, or gets fired. It doesn’t have to be that way. In this article governance and leadership expert Stanislav Shekshnia draws on 25 years of advising boards and CEOs on leadership succession and a 6-year research project covering 15 countries to explain four rules that incoming CEOs should bear in mind as they take up the job: start preparing for your departure early; get your board to help you; have a retirement plan; and make the break clean