The five pitfalls of CEO succession
The continuity and long-term success of a company depend entirely on the quality of its leadership. Ensuring smooth CEO succession is therefore one of the supervisory board’s most important responsibilities. Yet practice shows that many supervisory boards struggle with the succession issue. It is a sensitive matter because it involves people. And because people are complex, it is also not easy to objectively identify ‘the best’ or ‘the top candidates.’
We also see that the board as a whole typically devotes too little time to discussing CEO succession. The issue is often outsourced to the selection and appointment committee, which in practice – precisely because it is such a sensitive matter – records very little in writing. If documents do exist, they are often written by the HR director. This is problematic. The HR director may ultimately report to a CEO whose appointment he or she may have influenced through the selection process. Logically, this can hinder objectivity. If CEO succession is the most important responsibility of a supervisory board, the entire board must take ownership of this and also take care of the documentation as a board.
What kind of leader are you looking for?
A successful succession approach requires a strategic, ongoing process. To understand what that looks like, it is important to first analyze where things go wrong in practice. The first pitfall is timing. Supervisory boards still too often approach CEO succession as a one-time event at the end of the incumbent CEO's term. Our philosophy is that succession should be a continuous process and therefore effectively begin on the day of the appointment. This early start requires the supervisory board to reflect on the vision for the corporate culture and leadership. As an organization, do you opt for internal promotion, potentially long careers, and stability, or for external recruitment and constant ‘Google-style’ innovation with an ever-changing group of people? Only once that culture and the long-term strategy are clear can the supervisory board draw up a specific and future-oriented job profile. This approach prevents the process from becoming personal or emotionally charged. It is then about ‘our process around leaders,’ and not about the person him- or herself.
A second pitfall is searching for a ‘clone’ of the current CEO. This is dangerous because, if the current strategy is successful, the leader of the future is by definition not the same as the leader of today. The ideal profile must reflect future strategic options, not past success.
Too little control
The third and perhaps biggest pitfall is relinquishing control. All too often, the incumbent CEO is given a leading role in the search for his or her successor. That is like not only inviting the turkey to Thanksgiving dinner but also asking it to organize it. This is never a good idea, because the incumbent CEO is, after all, the only one who will certainly not be there on the day the process concludes.
Because the supervisory board is left to deal with the consequences of the CEO’s choice, the board must also bear full responsibility and formal ownership. Although the current CEO will in practice handle much of the operational work, this must always be done strictly on behalf of the supervisory board or the nomination committee. The board sets the parameters; the CEO reports on progress. This difference in control may seem subtle but is essential for an independent and future-proof succession process.
A too small candidate pool
When boards consider succession, they often make a double mistake: they fixate on just one or two 'crown princes' (pitfall four: A too limited pool) and they approach this detached from the broader leadership potential (pitfall five). This is dangerous for two reasons.
First, singling out a small elite creates unhealthy political dynamics within the organization. As soon as the focus settles on a single favorite, the balance of power shift immediately. Colleagues begin to strategically align with the intended successor, prematurely eroding the authority of the current CEO. Second, the board loses focus of the bigger picture, and succession becomes detached from the broader talent management system – and thus the potential internal succession pool. And not unimportantly: a larger pool actually fuels mutual competition among candidates, who all want to prove that they meet the profile (or will do so, when the time comes).
Toward a successful process
Data from McKinsey Quarterly, based on a survey of more than 1,000 corporate directors, shows that the impact of these mistakes can be destructive. The main reason new CEOs fail lies in the supervisory board’s inability to determine in advance the core skills and competencies expected of the newcomer. This leads to ineffective development of internal candidates and to the evaluation of external candidates based on unsuitable criteria.
We therefore advocate a cyclical, systemic approach in which CEO succession is transformed from a secretive, politically charged game of musical chairs into a continuous, measurable process. Based on best practices, we can offer a number of concrete recommendations. Make succession a regular agenda item. Evaluate the internal talent pool (and in a large company, this can also be the top two hundred) annually based on the strategic future profile. Monitor their progress in terms of training, job rotation, and strategic challenges. During the board meeting, explicitly ask the question: ‘What do we do if the CEO does not show up tomorrow?’
Stop searching one-dimensionally for a new leader. Approach CEO succession as a game of chess in which the entire management team must remain in balance. After all, the modern CEO is no longer an authoritarian soloist, but the ‘conductor’ of an orchestra composed of highly qualified specialists. Therefore, for every potential candidate, immediately assess what gap his or her promotion will leave in the operational team and simultaneously formulate a succession plan for that role. After all: if, for example, you promote a top internal performer to CEO, you may solve the succession issue, but at the same time you create a gaping hole in the orchestra. If you bring an external candidate into the existing orchestra, the dynamics change just as much. A systemic approach is a constant scenario exercise in which the board looks at the entire leadership team. If we move chess piece X, what vulnerability arises at position Y, and how do we address that? This ensures a well-thought-out, balanced team with a significantly greater chance of long-term success.
Nurture external talent
Naturally, there are also people outside your own organization with very interesting job profiles. You do not want to rule them out in advance. Therefore, proactively identify the best external talent in the sector, for example by consulting public lists, rankings, and analyst reports, or by asking around in your network. A Norwegian client goes a step further. There, each of the eight supervisory board members meet informally for coffee with an external high potential once a year to build a relationship. If the company at any point decides to start a process, one phone call is all it takes, and they can skip the step of engaging an external recruitment firm. During the selection phase, the board must then evaluate both internal and external candidates against the exact same criteria of the future leadership profile in order to arrive at a well-considered choice.
Well-structured succession planning instills confidence in the long-term future of the company with the supervisory board, management team, employees, and shareholders, while mitigating succession risk. By implementing robust processes, an organization can turn its succession risk into a strategic competitive advantage. Successful CEO succession is therefore the ultimate demonstration of mature, future-oriented, and responsible leadership.
This essay was published in Management Scope 06 2026.