In a world of relentless change and rapidly emerging new challenges, the CEO role has never been more demanding. The result? More CEOs are leaving their posts — and more boards are confronting high-stakes succession decisions.
The data tells a clear story. CEO departures in the largest listed firms reached a new global record in 2025, rising 16% from the previous year and 21% above the eight-year average, according to indices tracked by Russell Reynolds Associates, a U.S. headhunting firm.
Meanwhile, the length of time CEOs remain in the role has dropped to an average of seven years from just over eight years in 2021.
The bottom line is that CEO tenures are getting shorter, while expectations are rising – and tolerance for missteps is diminishing. In unpredictable times like these, the need for boards to have robust succession plans in place is a strategic imperative.
Many departures are the result of disciplined planning, as companies take the opportunity to enact orderly and carefully thought-out transitions.
But companies should think hard about the trend for increased and more rapid CEO turnover and their response to it, says IESE Professor Guido Stein.
“The turnover has a lot to do with the culture of the company – if we prioritize short-term results then we get short-term CEOs,’’ he says.
Once they make their choice of CEO, companies must work with that person so that they can grow in confidence and become as effective as possible in the role as quickly as possible, says Arturo Llopis, a partner at Spencer Stuart who holds an MBA from IESE.
“Adaptation is one the biggest issues in high level appointments,” says Llopis, a former professional basketball player for FC Barcelona.
Why the right choice of leader matters more than ever
Professor Jordi Canals, who leads IESE’s Center for Corporate Governance, argues that shorter CEO mandates reflect the challenges stemming from increasing technological, and also geopolitical, disruption.
Choosing the wrong successor can damage earnings, morale and reputation. Selecting the right one can reposition the company for its next chapter.
Yet success is far from guaranteed. Research cited by McKinsey shows that two years after CEO transitions, between 27% and 46% are considered failures or disappointments. That’s a sobering statistic for boards — and for executives aspiring to the top role.
As IESE Professor Josep Tàpies notes, the goal of a successful transition should be continuity of purpose, combined with renewal. Each CEO change should be an opportunity to redefine what kind of leadership the company needs next, says Prof. Tàpies.
To that end, boards should ask:
- What stage of development is the company at?
- What capabilities will be required over the next five to ten years?
- What kind of predecessor is stepping aside — and what kind of successor is emerging?
- Is the company itself prepared for succession in terms of governance structures, management systems and clarity of roles?
Practical steps for handling leadership change
So, what can board members do to prepare for, enact and ensure smooth and successful leadership transitions? Here’s a list of Llopis’s recommendations:
1. Have a clear role specification
Determine what the role is, what you want the CEO to accomplish, what experience and skills the ideal candidate has, and what specific leadership capabilities the person will need.
2. Identify internal candidates
At least two years before the CEO transition takes place, identify who in the organization has, or might develop, the selection criteria you need.
3. Develop internal candidates
After measuring your candidates’ potential to grow and evolve, craft a development plan for them. As well as skills such as strategic thinking and people management, focus on specifics such as politics and board management.
4. Check the market benchmark
About developing your internal candidates for about 18 months, it’s time to check what external CEO candidates might offer. Compare the level of potential internal, and external, leaders.
5. Choose the right successor
After completing and reviewing the previous steps and carefully assessing your internal, and, if relevant, external options, it’s time to make your choice.
6. CEO acceleration
As well as managing the company’s team, culture, strategy and the board, new CEOs also need to manage themselves carefully, especially in the first six months in the job. Adaptation is key to a new leader’s success, and boards should be ready to support them through this process.
A responsibility for everyone
A change in leadership is not just a boardroom issue – it affects executives at every level. Understanding how leadership transitions are managed within your organization — and how talent is developed — is critical for anyone on the executive ladder.
Companies that treat CEO succession and executive development as a strategic priority will have a decisive advantage. Handled well, a successful leadership transition equips organizations to renew themselves — and to lead confidently into the future.
