Most corporate boards make two critical mistakes when it comes to CEO succession.
First, their boards fail to make it a continuous point of discussion, and so it devolves into a reactive, episodic exercise that typically excludes any semblance of creativity, risk-taking and inclusion.
Second, they fail to understand that CEO succession is the business process most subject to internal and external influence, politics, ego and reputation building.
Over the years, numerous studies have revealed that a surprisingly high number of global corporations lack a formal, ongoing plan for CEO succession. Others don't even have a crisis plan for dealing with an emergency involving immediate succession for the CEO - the proverbial "hit by a bus" contingency plan.
Correcting this requires actual board governance, and a demonstration of the board's serious intent to institutionalise CEO succession discussions on the board meeting agenda, make it a priority and do more than pay the topic lip service.
Boards must also realise just how influenced CEO succession is by their member Directors, by the outgoing CEO, by candidates for the role, current executives, executive search consultants and other advisors, such as those who perform board evaluations.
For this reason, the board must ensure it doesn't cede control by handing the process over entirely to any one of these parties. Rather, it must orchestrate a process that is inclusive yet one that also clearly defines the contributions and roles of each party.
CEO succession is clearly a case of quality in, quality out. You simply can't maximise quality and maximise your succession options when all you can do is scramble to react or simply don't understand all the different influences on the process and the result.