CEO Succession

Choosing a new CEO is one of the most difficult and critical decisions for the board of any organization. The decision-making is further complicated by the fact that most boards and nomination committee members are only rarely involved with CEO selection. For these reasons Egon Zehnder International has developed a dedicated service that helps companies to be confident that they are well prepared for an orderly and successful CEO transition at the appropriate time. Our Firm conducts many CEO assignments each year and our most experienced consultants are involved in working with our clients during these assignments, all of which have distinctive characteristics.

When selecting candidates for all senior leadership positions, best practice dictates that the organization should look at both the best internal and the best external options. As a result, we always recommend and help our clients to conduct a regular effort to assess and develop likely internal contenders who could one day lead the organization. And in the event that it proves necessary to launch an external search for a new CEO, we have the capability to access the best talent available for the role worldwide whilst respecting the highly sensitive nature of the assignment.

It has become best practice for boards to plan for CEO succession. A good succession plan is more than a contingency plan: It involves talent recruitment, development and retention planning to provide the company with a pipeline of outstanding leaders who represent genuine CEO options for the medium term. 

Egon Zehnder International supports this stage of CEO succession planning with multiple services:

• CEO appraisal to determine the current CEO’s recent performance and also suitability for the organization’s future needs. Ideally, this should be conducted annually and should include defining the evolving job requirements and position specification;
• Successor candidate assessments against CEO competencies that result in individual development plans for top executives with the potential to become the CEO;
• External talent mapping: Boards should have a clear understanding of the quality of leaders in relevant institutions who could be attracted to build their bench strength or be compelling external CEO candidates;
• Recruitment of potential future CEO successors into the top executive team two or three years in advance provides more options for the board when the time comes to choose the new CEO, thereby reducing the risk involved in transitioning to the new CEO;
• Introduction of outstanding leaders for recruitment or benchmarking, to provide an appreciation of the strongest leaders who could be attracted to the organization.

Systematic planning creates genuine options for the time when the board needs to start the CEO selection process in earnest.

CEO selection is very different from all other executive searches. Its unique status results from the combination of the number of people involved, the importance of the decision, the effect of the decision on the motivation of internal candidates irrespective of the outcome, the competencies required in the job and the requirement for confidentiality. Accordingly, we have developed a robust process for these assignments which includes taking very detailed references, seeking global solutions, and working closely with the board and the nomination committee. 

A CEO’s success, particularly early in their tenure, is helped by effective integration. With this in mind, we offer services that support the onboarding of the new leader in the early months following their appointment. Typically this involves two in-depth 360° reviews during their first year in office. 

Egon Zehnder International is distinctive in its ability to advise organizations on the identification and development of both internal and external candidates with the potential to become future CEOs. Our "One Firm" private, global partnership with shared P&L responsibility gives rise to an unrivalled level of collaboration which enables us to quickly identify all qualified candidates wherever they are located. Our collaborative approach permits us to ensure that the most suitable and experienced consultants are selected to handle the assignment, and that they can also draw upon the full global resources of the Firm, making for unmatched access to both candidates and references.