By Bothwell Nyajeka
SUCCESSION planning, particularly the appointment of the chief executive officer (CEO), is one of the most critical responsibilities of a board of directors.
The board exercises its oversight of the company primarily through the CEO. As such, the quality, effectiveness, and performance of the CEO are a direct reflection of the board’s own effectiveness.
When shareholders are dissatisfied with a company’s performance, they ultimately hold the board accountable, and they can remove it. It therefore follows that appointing, developing, and planning for the right CEO is not optional; it is central to the board’s fiduciary duty.
Despite its importance, CEO succession is often one of the most sensitive and uncomfortable topics in the boardroom. In well-performing companies, boards frequently avoid discussing succession because they fear the CEO may interpret it as a lack of confidence or as an attempt to find a replacement. Ironically, in underperforming companies, directors may also shy away from the subject, reasoning that raising concerns about succession could distract or demotivate a CEO who should be focused on turning the business around.
The situation becomes even more complex where the CEO is long serving and enjoys strong relationships with a major/controlling shareholder. In such cases, succession planning can quickly become political.
I recall serving on a board where the failure to address CEO succession early and openly resulted in the CEO remaining in office well beyond retirement age. Board members quietly expected the CEO to announce that he was ready to step down. That announcement never came. The CEO was understandably reluctant to retire given the personal financial implications of leaving office. The cost of the board’s inaction was a prolonged leadership limbo that was not in the best interests of the company or its shareholders.
Because planning for the next leader is a strategic imperative, CEO succession should be a standing item on the board agenda, discussed at least once a year, and formally overseen by the Human Resources and Nominations Committee. Treating succession as a routine governance matter, rather than a crisis response, reduces anxiety and ensures continuity.
There are several key considerations in effective CEO succession planning as fully discussed below.
First is alignment at board level on the company’s short term and long-term strategy. The board must be clear on where the business is going before it can decide what kind of leader it will need. Importantly, this requires directors to look beyond how the company is being led today and instead focus on what tomorrow will demand.
The accelerated pace of digital transformation, the rise of artificial intelligence, shifts in customer behaviour, climate change, and increasing regulatory and stakeholder scrutiny are reshaping what effective leadership looks like. In the circumstances, boards need to rethink the skills and capabilities they seek in a CEO. Technical competence alone is no longer sufficient.
Directors must also identify the leadership qualities required to sustain or transform the organisation’s culture. If the existing culture is misaligned with future strategy, the board must consciously define the type of leader capable of driving cultural change. This process should include structured engagement with the current CEO and the executive team to agree on the attributes that define CEO success, both now and in the future.
Secondly, the incumbent CEO should be actively involved in succession planning, particularly in identifying and developing internal candidates. In one group of companies I was involved with, there was a formal process for identifying potential future leaders, who were referred to as “High Flyers.” These individuals were deliberately exposed to structured leadership development programmes, including executive education, to create a strong pipeline of future CEOs and senior executives for the group.
In such arrangements, the CEO maintained a succession map showing the current executive structure and potential internal successors for key roles, including their own. Where gaps existed, targeted recruitment was undertaken to strengthen the leadership bench. The board was kept fully informed of the succession plans, as well as the details of leadership development initiatives.
It is also good governance practice for the board to discuss CEO succession in sessions that exclude the CEO, allowing for candid and independent deliberations. At a minimum, the succession plan should be reviewed annually.
Thirdly, every board must have a clearly defined emergency succession plan. Leadership transitions are not always orderly. A CEO may resign unexpectedly, fall ill, or depart suddenly for unforeseen reasons. In such circumstances, uncertainty can destabilise the organisation. An effective emergency plan identifies credible interim candidates. This is often the Chief Financial Officer, Chief Operating Officer, or another senior executive, who can step in immediately while the board executes a longer term process to replace the CEO.
Fourthly, boards must foster a culture in which CEO succession is discussed in the boardroom openly, transparently, and without stigma. It should be a normal, recurring boardroom conversation, regardless of who occupies the CEO role or how well they are performing. When treated as routine, the discussion becomes less personal and less threatening.
I recall working in a company where the prevailing culture was that no executive could be promoted unless they had successfully groomed a successor. This simple rule forced leaders at all levels to invest in talent development and ensured continuity across the organisation. Boards can reinforce this mindset by making succession planning a key performance indicator for the CEO. The CEO should be accountable for identifying potential successors and ensuring they receive appropriate exposure, mentoring, and training.
Finally, the board must exercise strict control over how succession planning is communicated. Poorly managed disclosure, rumours, or unclear messaging can create anxiety, erode trust, and destabilise both the executive team and the wider organisation. Succession plans should therefore be handled with the utmost confidentiality. Any external or internal communication must be carefully timed, deliberate, and consistent. Until the board is ready to make an announcement, the plan must be airtight.
In conclusion, CEO succession planning is not a one-off event triggered by crisis or retirement. It is an ongoing governance process that sits at the heart of the board’s responsibility to safeguard the long term interests of the company and its shareholders. Boards that approach succession planning proactively are far more likely to ensure leadership continuity, organisational stability, and sustained performance.
Nyajeka is a Chartered Accountant and business leader. He has vast experience as a corporate executive and has sat on various boards in Zimbabwe, Botswana, South Africa and Uganda. He is currently chairman of ACR Solutions and is also a seasoned trainer and facilitator for the Institute of Directors Zimbabwe (IoDZ). For board advisory, executive coaching, leadership development and business turnaround consulting. Email him on: bnyajeka@acr4solutions.com