Eight Myths About CEO Succession

By Dennis McCafferty  |  Posted 04-18-2014 Email Print this article Print

With the turnover rate of CEOs ranging from 10 percent to 15 percent in any given year, you might conclude that organizations are prepared for replacing their top leader at any given moment. But you'd be wrong. The majority of companies don't really have an effective succession game plan, according to a recent article from David Larcker and Brian Tayan of the Corporate Governance Research Initiative at the Stanford Graduate School of Business and Stephen Miles of The Miles Group. To demonstrate their point, the article's authors have developed a list of top "myths" about the succession process. Success, they argue, depends upon much more than a healthy financial book and a rise in the company stock price. "Many believe that the selection of the CEO is the single most important decision that a board of directors can make," according to the article, which was published in the Stanford Closer Look Series. "In recent years, several high-profile transitions at major corporations … have cast a spotlight on succession and called into question the reliability of the process that companies use to identify and develop future leaders." The following list of top CEO succession myths, along with the realities behind them, was adapted from the article, along with additional myths from the CD Consulting Group. For the Stanford Closer Look Series article, click here. For more about CD Consulting's list, click here

Dennis McCafferty is a freelance writer for Baseline Magazine.


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