Succession planning among directors' top priorities in 2025: report

'Steady and focused leadership is essential for companies to execute on their growth strategies'

BY Dexter Tilo 15 Apr 2025

Succession planning has emerged as one of the top priorities of organisations this year amid concerns over the impact from sudden departures of CEOs or other critical talent.

This is according to What Directors Think 2025, an annual survey from Diligent Institute, Corporate Board Member, and FTI Consulting.

"One of the things we learned this year is that CEO succession planning is rising up the ranks as a board priority for 2025," said Dottie Schindlinger, executive director at Diligent, in a statement.

According to the report, a third of directors of publicly traded companies in the US have cited improving or revising their CEO/C-suite and board succession planning as a top priority for them in the year ahead.

Moreover, 43% of the respondents said they would add CEO or C-suite succession as one of the most pressing matters for their board to discuss if they were in charge of setting the agenda for their next meeting.

Succession planning surpassed the adoption of AI as one of directors' top priorities, as well as workforce planning, and improving cybersecurity measures, according to the report.

"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," Schindlinger said.

Preparing for sudden disruption

The rise of succession planning in directors' priorities has been attributed to their growing awareness of potential risks from the sudden departure of CEOs or other mission-critical talent.

According to the report, 69% of directors believe that sudden departures of CEOs or other critical talent have a "significant impact" on their organisation.

KPMG senior advisor Annalisa Barrett, in an interview with Schindlinger for The Corporate Director Podcast, outlined five measures that organisations should remember in planning for their succession strategy this year. They are:

Outline a process for the three types of succession scenarios, which are long-term planned transitions, unplanned short-term transitions, or emergencies where the CEO is there one day and gone the next.
Get the current CEO involved with the succession plan so they can provide input on their successor.
Communicate the succession plan with investors and key stakeholders to enable the board to select appropriate candidates and name a new successor in all scenarios.
Delegate succession planning to the right people, including a nomination or governance committee, directed by the board chair and informed by the sitting CEO.
Know what type of CEO the company needs by considering the steps that the company needs to take to navigate upcoming challenges and grow over the long term.