CEO succession planning is important. But how you go about it makes all the difference
Succession planning is crucial for strategic business management and remains a top priority for boards, alongside fundraising and maintaining balance sheet health, says Ishwa Consulting “Our research indicates that companies with robust succession plans outperform their peers by 20% in revenue growth and shareholder returns. However, promoter-driven companies continue to lag behind. In 2024, 27% of promoter-driven companies have formal CEO succession plans, up from just 9% a decade ago,” it adds.
The benefits of strong CEO succession planning
Harold D’Souza, Co-founder and Director of WalkWater Talent Advisors, quotes a study by the Harvard Business Review that found that in the S&P 1500 index, companies that neglected their leadership pipelines and succession planning practices collectively lost nearly $1 trillion annually. The biggest costs were underperformance at companies that hired ill-suited external CEOs, the loss of intellectual capital in C-suites of organisations that executives left and, among companies that promoted from within, the lower performance of ill-prepared successors.
Given that effective CEO succession planning is critical to ensure a company's long-term stability and success, Somdutta Singh, Founder and CEO of Assiduus Global Inc, says companies should not wait for a crisis to initiate succession planning. Ideally, this should be an ongoing process that starts early in a CEO’s tenure.
Ishwa Consulting says the “corner office hustle” goes beyond filling a vacancy; it's about ensuring a
