Should Your Next CEO Come from Your Board?

In some situations, it’s an option well worth considering. by Reshmi Paul, Heidi Smith, Samantha Hellauer and Shoma Hayden

From the Magazine (November–December 2024)

Giulia Neri

Summary.

These days a growing number of companies are hiring their directors to be their new CEOs. From 2018 to 2023, 10% of incoming CEOs across the S&P 500 and Russell 3000 came from the board. Though this choice is still more an exception than a rule, there are compelling reasons to consider it. As insiders, board members have a valuable feel for the company’s culture, history, and strategy, and as outsiders, they can more easily challenge the company’s existing ways of operating. Board-to-CEO transitions must be handled with care, however. In this article, the authors describe when it makes sense to appoint a board member to the top office, what can go wrong, and how to manage the sensitive dynamics involved to boost the odds of success.

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When a company gives the CEO job to one of its own board members, people often assume that something must have gone wrong behind the scenes. Maybe the company is desperately trying to get itself out of a protracted period of tumult. Maybe the previous CEO’s departure was unexpected or forced, and only a tried-and-true board member can keep the ship sailing steadily until a permanent replacement can be found. Maybe the CEO’s departure was routine and expected, but somehow the succession-planning process just came up short.

Read more on Succession planning or related topics Boards and Leadership transitions

A version of this article appeared in the November–December 2024 issue of Harvard Business Review.

Read more on Succession planning or related topics Boards and Leadership transitions

Should Your Next CEO Come from Your Board?

Summary.

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