Survey Finds Communication and Planning Key for CEO Transitions
New York — May 18
In January of this year, RHR International, a management consulting firm, and Corporate Board Member, surveyed 246 board members, predominantly from companies of $1 billion in revenue and above, to find out more about their CEO succession and transition experiences. More than 50 percent polled serve as outside directors, with the remainder primarily chairmen or CEOs. Most respondents indicated they had experienced three or more CEO transitions in their careers.
The survey also found:
• A successful transition requires a sound plan that is supported by the board and management
• Clear communication is essential early on
• The plan should closely correspond and align with the company’s business strategy, outline clear expectations and provide a means for consistent feedback
• For best results, the new CEO should strive to operate within the current culture
• Resources such as inside mentors, personal coaches, and strategy consultants can enhance the process Survey respondents were evenly split on whether an outgoing CEO should exit quickly or participate in the transition period with the new CEO.
According to Joseph L. McGill Jr., a partner at RHR International and an expert in the field of CEO transitions, “There are some cases where a clean break is best and others where some overlap is valuable. A major factor is the chemistry between the two executives. Either way, the outgoing CEO can make a big contribution prior to the transition.”
Source: Corporate Board Member