Stewardship | ~4 min read
The succession planning gap
This year’s annual general meetings have exposed persistent weaknesses in succession planning at a time when corporate leadership turnover is rising.
Chief executive officer turnover reached an eight year high globally in 2025.1 Shorter tenures mean more frequent senior leadership vacancies which have increased scrutiny of succession planning at shareholder meetings. Strategy shifts, compliance or conduct issues, and health events have all led to sudden executive departures in recent years – and there has not always been a clearly identified successor.
Interim arrangements can weaken continuity and slow critical decision-making, underscoring the need for a more structured, forward-looking approach to leadership transitions. Succession planning for Chair positions has been a notable area of weakness. This has led to Chairs staying longer or interim Chairs being appointed without a long-term solution on the horizon. The resulting uncertainty suggests succession planning often begins too late.
Planning ahead
For investors, insufficient succession planning raises leadership, governance and resilience risks, particularly in an uncertain macroeconomic and geopolitical environment. A proactive and systematic approach to succession planning can help safeguard long-term value underpinned by stable leadership structures, strategic planning and organisational resilience. Robust contingency plans should exist – even if specific succession plans cannot be publicly disclosed – and internal talent pipelines should be fostered for key executive roles.
Nomination committees are generally expected to initiate search processes for Chair positions well ahead of planned transitions. Successors should be appointed early enough to gain familiarity with existing systems and participate in at least one full board cycle – especially if they are new to the board.
Our expectations
We expect to see transparent, criteria-based selection processes relevant to the strategic context. Ideally, these should be supported by external advisors. Candidates should have the industry expertise, leadership experience and international exposure needed to provide independent oversight and ask effective questions of management. While succession considerations differ between one-tier and two-tier governance structures, our preference is for appointing genuinely independent Chairs rather than former company executives.
Additionally, communication with investors should be clear and consistent. Outgoing Chairs may not be best placed to discuss their own succession, so roles like Lead Independent Directors can facilitate the necessary investor dialogue (read more).
As leadership transitions become more frequent, closing the succession planning gap remains important as a key component of effective governance and to underpin organisational stability and investor confidence.
Read our previous post on governance in the spotlight in the 2026 proxy voting season.
1 Russell Reynolds, Global CEO Turnover Index, 2026
