Managing leadership succession is increasingly becoming a strategic imperative for Boards. Economic uncertainty, geopolitical complexity, growing people risks and rapid technological shifts – particularly AI and digital transformation – are redefining what effective leadership looks like. The pace of change facing organisations requires transformation alongside organizational stability – with leadership instrumental to both. Although changes to leadership are inevitable, the preparedness of an organisation to select successors and manage the change effectively require careful forward planning.
Our research tells us a lot about CEO tenure and succession trends – how prepared organisations are – and the cost if succession and managing leadership change isn't appropriately planned for.
Across the FTSE 350, we're seeing:
WTW research highlights a critical challenge for boards: Leadership succession and development rank as boards' top human capital priority, but nearly 60% believe they should spend more time on it. The gap between intent and execution is stark.
Succession planning builds resilience; yet many boards remain reactive, scrambling when vacancies arise rather than preparing proactively. This lack of readiness can amplify risk at the very top of the organization and impact investor confidence.
Why the urgency? The CEO role has never been more demanding. Leaders must navigate ambiguity, drive innovation, and nurture culture under intense scrutiny. A WTW pulse survey this year reveals that 65% of HR leaders cite the ability to lead through ambiguity as their biggest concern. Succession planning is not a one-off, tick-box exercise – it's fundamental to future-proofing and ensuring leadership capability aligns with strategy, culture, and innovation priorities as they evolve. Boards that fail to plan, risk prolonged vacancies, misaligned appointments, and cultural disruption – all of which can erode investor confidence, undermine the talent experience and ultimately impact organizational performance.
Succession planning should be viewed as a strategic capability, not a contingency plan. Here are five guiding principles:
01
Succession decisions must reflect future priorities, not simply replicate the incumbent profile. We're seeing trends across digital acceleration, sustainability and innovation, but every organisations skills for the future will look slightly different, so identifying and planning for these is important at executive level (and beyond).
02
Boards increasingly value agility and adaptability over tenure, signalling a shift toward leaders who can thrive amid ambiguity and transformation. Narrow candidate pools may mean you miss out on the skills you need for the future.
03
External hires bring fresh thinking but at higher cost and with cultural risk. Investing in internal leadership development ensures a strong pipeline of internal candidates, reducing reliance on external appointments.
04
Compensation decisions should consider total remuneration, market benchmarks, and candidate experience – particularly whether they are a first-time CEO or have listed-company board exposure.
Boards are also taking a longer-term view of talent pressures below the CEO level – especially regional / business unit leaders in global markets – which can create Executive Director pay compression. These dynamics contribute to the fact pattern we are seeing companies use to support bold policy changes – all linked to driving strategy, maintaining competitiveness and retaining and attracting the necessary executive talent
05
Succession planning can be sensitive as it's often episodic and perceived to be linked to performance. However, with the right rationale and robust process in place, boards can shift the perception to an essential planning mechanism for organizational resilience and embed it as an ongoing Chair responsibility.
Leadership succession is not about filling a vacancy – it's about safeguarding the organization's future. In an era of volatility and transformation, boards must move beyond reactive approaches and embed succession as a core strategic discipline. Those that do will not only mitigate risk but position their organizations to thrive amid uncertainty.
Organizations can make a start by reviewing their talent and remuneration strategy to identify any gaps and blockers to effective succession planning. It's also important to remember that defining the practical succession process is just one element. The identification of skills for today and skills for the future, to deliver on business strategy, is critical for defining talent pools and actively planning leadership development – all with the common goal of future proofing the success of an organization.
