Succeeding at succession.

• Author: Rock, Robert H.

Over twenty years ago I completed my doctorate at the Harvard Business School. My dissertation examined the role of the chief executive officer in managing major transitions, with a particular focus on CEO succession. At that time, a board of directors generally followed the lead of the outgoing chief executive who identified and groomed a successor from within the ranks of top management. His selection was presented to his board for ratification.

Today, the choice of a new CEO is the first and foremost accountability of a board of directors. The CEO participates in succession planning, but the board, especially the independent members, directs the process. Moreover, most boards today insist on surveying outside talent to provide an external benchmark for evaluating inside candidates. Today's succession process is often led by a search committee; however, the full board retains ultimate authority for its conduct and ultimate accountability for its outcome.

Recognizing when a new CEO is needed requires that the board keep up with the ever-changing opportunities and challenges facing the organization. When developing succession plans, a board should not rely merely on the planned retirement of the current CEO. Instead, a board should plan succession based on anticipated need. Moreover, in effecting a CEO change, the board should not await a financial crisis or market failure such as those that preceded CEO firings at some high-profile companies.

In a recently released report on CEO succession, a Blue Ribbon Commission...