“One of the things we learned this year is that CEO succession planning is rising up the ranks as a board priority for 2025,” says Executive Director at Diligent Institute Dottie Schindlinger. “Though it should always be top-of-mind in the boardroom, succession planning is a growing priority right now because steady and focused leadership is essential for companies to execute on their growth strategies, which 76% of directors told us was a goal in 2025.”

Notably, the data comes following a spike in CEO and senior executive departures in the previous year. For example, the major news of Bob Iger leaving Disney also brings to light successful succession planning as a mainstream priority for all companies. “Boards are seeing CEO departures, particularly unplanned departures, as a real source of risk. They view it as something that can completely upend their strategy for the year,” says Schindlinger.

What does the survey say?

Surveying more than 200 directors in the US from public companies, 34% of respondents (over three in 10) believe succession planning for CEOs and C-suite executives is the top priority for 2025. More directors are selecting succession planning as a top priority compared to other pressing factors, such as adopting AI (27%), workforce planning (26%), improving cybersecurity (25%), and managing geopolitical risks (10%).

Succession planning at the CEO and senior executive level is second only to ‘strategy’ on the list of issues directors find most challenging today (selected by 30% of respondents). The number of respondents choosing it has more than doubled compared to 2024. Additionally, CEO succession planning ranked third on the list of issues directors wanted to discuss at their next board meeting, suggesting that having the right leaders in place is becoming a greater concern for boards amid increased geopolitical tension and continuing uncertainty.

When asked to grade their board’s effectiveness on its CEO succession planning process, only 21% of directors would go as far to say they had an ‘excellent’ process in place. Meanwhile, 17% admitted their current succession process was ‘poor’, which is more than any other dimension of board service including factors like understanding long-term strategy.

In a special 150th episode of The Corporate Director Podcast, Dottie Schindlinger interviews senior advisor at KPMG Annalisa Barrett on the growing importance of CEO succession planning. Here are five key takeaways that board members should know to plan a succession strategy in 2025:

1. Outline a process for the three types of transitions. Ensure that the board is ready to act when a departure occurs. Processes should be outlined for a variety of scenarios in which the CEO might be unable to continue in their role. In general, three common succession scenarios are long-term planned transitions, unplanned short-term transitions, or emergencies where the CEO is there one day and gone the next.

2. Get your current CEO involved in the succession plan. Communicate with your CEO so that they can provide input on their successor. Ideally, your CEO should understand that this process is not a personal affront; it’s about making sure that the company is in good hands in the long term, regardless of the circumstances surrounding the CEO’s eventual transition. The governance strategy around each transition scenario needs to be transparent, deliberate, and regularly reviewed. 

3. Communicate your succession plan with investors and key stakeholders. Requests from investors on transparency are about understanding the process that enables the board to select appropriate candidates and name a new successor in all scenarios, including emergencies, to maintain profitability. They are also looking to get an idea of the skillsets boards are looking for in someone able to take on the role. Documented and transparent succession processes foster greater board and governance collaboration and confidence from investors.

4. Delegate succession planning to the right people. The succession planning process must be triggered and put into action involving significant stakeholders. It’s typical for the process to be driven by a nomination or governance committee, directed by the board chair and informed by the sitting CEO. What’s most important is that the people involved are capable of successfully updating and executing the process.

5. Know what type of CEO your company needs. With 2025 and beyond set to be a period of turbulence and uncertainty, the succession planning process needs to define what the business requires for future success rather than looking in the rearview mirror. Consider what the company has to do to navigate upcoming challenges and grow over the long term. This will inform the desired skillset of a new CEO.

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