Roughly half of the corporate boards from public, private and nonprofit companies say they are “less than effective” at CEO succession, and only a similar percentage have a succession plan in place, according to a new survey.
Corporate directors, having largely addressed the new requirements of Sarbanes-Oxley, are worried about a new hurdle: CEO succession.
Roughly half of the corporate boards from public, private and nonprofit companies say they are “less than effective” at CEO succession, and only a similar percentage have a succession plan in place, according to a survey by the National Association of Corporate Directors and Mercer Delta Consulting. Less than 15% of the 1,400 directors surveyed said their boards were “highly effective” in managing and developing their executive talent.
The report recommended that CEO transitions should take place over a minimum of a three-to-five-year period so that directors can be assured the new leader has been adequately trained and developed for the job.
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