Talk to most senior executives and the biggest challenge they point to is finding and holding on to talent. The opposite should hold true for boards and the other directors. Letting go of a chief executive and finding the right person to replace them should be their top priority.
Corporate history is littered with examples of boards that mastered growth only to falter when faced with the most fundamental decision of all: who comes next?
Succession is the one strategic issue that cannot be deferred indefinitely. For companies led by long-serving or dominant chief executives, that challenge is magnified. The longer a leader stays, the more the organisation bends around them and the harder it becomes to imagine a future without them. It is most acute in family-owned businesses and increasingly so among hot tech start-ups as they mature.
In a Christmas interview with the Financial Times, Ryanair chief executive Michael O’Leary said he would be happy to continue in the role after his existing contract expires in a few years. All told, he could stay until the middle of the next decade if the board wanted him to.
Succession is a process, not an event
O’Leary is Ryanair in the public imagination. His eventual departure will be a cultural shift as much as an operational one. No doubt Ryanair has a list of internal and external candidates it believes could replace him when the day comes, but can it really get behind a successor when the ideal candidate would simply be a younger O’Leary?
Disney’s dud
Disney offers a cautionary tale. Bob Iger tried to retire after 15 years as chief executive in 2020. His chosen successor lasted barely two years before the board brought Iger back amid strategic drift and market unease. Now, Iger is preparing to leave for good, this time with a successor chosen by the board.
The lesson is not that succession failed once and then worked; it is that succession is a process, not an event. Disney treated it as a handover. What the business needed was a transition from a legend to somebody else who should have been groomed by the board to take the reins.
Future leaders need to fail in small ways while the safety net is still there
Succession planning that revolves around a date rather than capability is cosmetic. The real work lies in preparing the organisation to accept a different leader, with a different tone and possibly a different strategy and given the time to bed in.
Resist the clone
For long-serving chief executives, the temptation is to clone a replica: someone who thinks the same way, speaks the same language and will not disrupt the internal balance of power. This feels safe. It also stores up problems. Markets rarely reward imitation.
The most effective successions tend to be those where the outgoing chief executive gradually becomes less central, even before leaving. Decision-making is widened and other voices are heard. This is uncomfortable for leaders used to being in control, but it is essential. A company that cannot function without its chief executive is not well governed, however strong its financial performance is.
Preparation is just as critical for the successor. Future leaders need exposure to investors, regulators and crisis moments well before they take the job. They need to fail in small ways while the safety net is still there and they need backing when they do.
The best legacy is a business that keeps moving forward
All of this places a heavier burden on boards than they sometimes care to admit. Succession is often framed as something the chief executive owns, with directors acting as approvers rather than architects. That is a mistake. Boards that defer too much to a dominant leader risk inheriting that leader’s blind spots.
Ask hard questions
There is also a discipline required to think beyond the individual being replaced. Moving on from a chief executive should force boards to ask harder questions about what the company needs next, not what it has relied on up to now. Different phases demand different leadership. The skills that built scale or delivered turnaround are rarely the same ones needed for consolidation or reinvention. Treating succession as continuity by default is often a failure of imagination rather than strategy.
The best legacy a long-serving chief executive can leave is not a final flourish or a dramatic exit. It is a business that keeps moving forward once their name is no longer on the door. For boards and directors, that is the real measure of success.
