Selecting the new CEO is one of the Board's three most crucial
tasks, matched only by a decision to merge or sell the company,
or the selection of a new Chairman.
Merely announcing who your next CEO will be can move
the market value of your company by 5% or more, and
research by Harvard Business School on the value of a
great CEO suggest figures of around 15% of your company's
Yet this 'bet the company' decision is still often tackled too late, with no recourse to a contingency plan, and without the benefit of enough data - as a recent client commented "there was less
data in the process than in a footnote of a monthly Board pack".
To help Boards address this important topic, this article (In search of excellence
in CEO Succession: the seven habits of highly
effective boards) sets
out the seven steps required for addressing a specific foreseeable
succession need, and concludes with briefer suggestions for
longer-range planning. It also illustrates the type of assignments on which I typically work with clients.