CEO and board succession in the age of impact

The world is changing and with it, the role of business. Against the backdrop of eroding democratic norms and increased polarization, institutions are struggling to meet society’s needs on a vast set of social, environmental, and geopolitical issues that impact regional and global stability. Trust in government to address these needs is at historic lows around the world and dropping, while trust in business to do so appears to be growing.

A new concept of the corporation is being formed on the back of this trust, one that bleeds into the realm of public service. Governed well, this expanding license to operate can help business address many of society’s most pressing concerns and drive sustainable financial returns. We were given a glimpse of this expanded corporate concept during the COVID-19 pandemic and again in the Russia/Ukraine conflict. As we emerge from the pandemic and wrestle with the role of business in geopolitical settings, boards are trying to make sense of the path ahead, their role, and the trends that are driving this conversation. In planning for the future, our clients are paying specific attention to succession: their own and that of the CEO and board of directors. 

New approaches to recruitment and selection, evaluation, development, and replacement are emerging as boards explore the boundaries of their increasing responsibilities. In 2022, we saw an unprecedented rise in the number of boards engaging us to conduct multi-year “board mapping” exercises. Think of this as an insurance policy: as the standards for performance change, boards are expecting turnover, both voluntary and involuntary, and they want to be ready. We know that the board’s agenda is growing, and that frequency of deliberation is increasing. A lack of clarity contributes to exhaustion. In that light, our observations are designed to provide clarity on the trends affecting CEO and board succession and the specific steps we continue to see boards taking to lower risk and build confidence in this new environment.