Inside CEO Succession

A comprehensive guide to planning for CEO succession, from the experts at RHR As the demands from stakeholders for consummate leadership and good governance from a company's board of directors, its CEO, and its executive team increase, how the process of CEO succession is carried out has become more critical than ever before. Yet, over the past several years, a growing number of CEOs have failed early in their terms, often with devastating consequences to their companies and stockholders. By far the most common problem is a lack of ownership of the CEO succession process. Inside CEO Succession provides businesses, leaders, and boards with the strategies they need to execute their responsibilities with a heightened level of professionalism and ensure the sustained success of the companies they serve. Written by Dr. Thomas J. Saporito, CEO of RHR International, and Dr. Paul Winum, Senior Partner of RHR International, the lessons of Inside CEO Succession are rooted in RHR's long-standing history of bringing expert knowledge, experience, advice, and counsel to the issues related to CEO succession. The culmination of RHR's 65 years of experience providing expert counsel to the boards of directors of hundreds of companies, it explains how ego, role-relationships, power, and human dynamics associated with relinquishing leadership, preparing successors, and ceding power and authority to other people create undetected problems in the succession process and ultimately cause many CEOs to fail early in their tenures. Distills RHR's 65 years of experience helping businesses deal with CEO succession into one practical resource Presents strategies to enable boards to understand their role in succession planning and how to source leadership that best fits their organization's culture and requirements Brings together business acumen and psychological insight to help readers better prepare for more effective CEO succession To be successful, CEO succession requires a well-defined course of action that ensures that a number of highly capable candidates are ready to assume the chief executive position whether through an unexpected event or a planned transition. Inside CEO Succession is designed to help boards comprehensively manage that process and effectively sustain their company's profitability.

Acknowledgments xiii Foreword: Douglas R. Conant, former CEO of Campbell Soup Company xv Introduction 1 Part I: Why CEO Succession Is More Critical than Ever 5 Chapter 1: From Checkers to 3-D Chess 7 Chapter 2: Success or Failure—The Cause and Cost 21 Chapter 3: Whose Job Is It, Anyway? 39 Chapter 4: RHR’s Essential Point of View 55 Part II: The 10 Key Dimensions of Effective Succession 71 Chapter 5: Establish Board Ownership, Involvement, and Oversight 73 Chapter 6: Set Succession Time Frames 89 Chapter 7: Prepare for Emergencies 105 Chapter 8: Align on Strategy and Profile 119 Chapter 9: Build the Talent Pipeline 131 Chapter 10: Source External Talent and Manage Search Firms 145 Chapter 11: Select the CEO 157 Chapter 12: Proactively Manage the Transition 169 Chapter 13: Measure Performance and Improve Process 187 Chapter 14: Manage the Dynamics in CEO Succession 197 Epilogue: Perspectives on the Future 205 Appendix: Ten Questions a Director Should Ask 213 About RHR International 219 References 221 Index 229