CEO Succession Planning
Authors: Professor David F. Larcker and Brian Tayan,
Researcher, Corporate Governance Research Initiative
Stanford Graduate School of Business
The board of directors is responsible for ensuring that correct management is in place to run the organization. This includes hiring, evaluating, and—when circumstances merit—removing or replacing the chief executive officer.
This Quick Guide reviews the process by which the board carries out this function.
It provides answers to the questions:
• How are qualified CEOs identified?
• What skills and experiences are needed?
• Are “inside” CEOs better than “outsiders”?
• How do boards plan for succession?
• What models or approaches do they use?
For an expanded discussion, see Corporate Governance Matters: A Closer Look at Organizational Choices and Their Consequences (Second Edition) by David Larcker and Brian Tayan (2015): http://www.gsb.stanford.edu/faculty-research/books/corporate-governance-matters-closer-look-organizational-choices
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Copyright 2015 by David F. Larcker and Brian Tayan. All rights reserved.