A CEO’s departure can be announced in a day, but a credible successor takes years to develop. Companies that wait until an exit is imminent risk creating uncertainty at the top, intensifying internal rivalries, and placing an untested leader in charge. Effective succession planning begins while leadership is stable, with clear authority and potential successors tested through meaningful responsibility.
A chief executive’s departure is often presented as a single event: a board meeting, a regulatory filing and an announcement naming the replacement. The real transition begins much earlier.
By the time a company makes the news public, its directors should already know which internal leaders can run the business, how those candidates perform under pressure and whether the organisation will accept their authority.
This is why CEO succession planning is not mainly about choosing a name. It is about creating credible choices before the incumbent decides to leave. When boards delay that work, they often face an expensive decision between an untested insider and an external candidate who must learn the company while already running it. When they begin early, they can test future leaders in real jobs without weakening the chief executive who remains in charge.
CEO Succession Planning Is a Continuing Board Duty
The need for preparation has become more urgent as leadership turnover rises. Russell Reynolds Associates recorded 202 departures among chief executives of major global companies in 2024, the highest number in the study’s six-year history.
Nearly a quarter were planned successions, also a record. The figures suggest that more boards are treating leadership renewal as a regular responsibility, although abrupt exits and investor pressure still account for many changes.
A serious succession process should continue even when the incumbent is performing well and has no announced retirement date. Illness, a personal decision, a takeover, poor results or a disagreement with the board can shorten a tenure without warning.
The board therefore needs an emergency option for the next morning and a longer-term plan for the next several years. These are different questions. The executive who can steady the company for three months may not be the person best equipped to lead it through the next business cycle.
Early planning also improves the quality of internal candidates. A finance chief cannot become a plausible group CEO merely by attending more board meetings. The executive may need responsibility for customers, operations and a major business line.
A domestic leader may need experience in other countries. Someone known for expansion may need to demonstrate that he or she can close a weak operation, manage a crisis, and take difficult decisions about capital.
Apple Made the Successor Visible Before the Handover
Apple’s transition from Tim Cook to John Ternus illustrates the value of preparing an internal leader over time. Ternus joined Apple in 2001 and became head of hardware engineering in 2021. Before succeeding Cook in September 2026, he had overseen important product categories and appeared repeatedly at high-profile Apple events. The company therefore did not have to introduce an unknown executive to employees, developers, suppliers or investors on the day of the appointment.
The preparation also matched the strategic question facing Apple. Cook built his reputation through operations and turned Apple into one of the world’s most valuable companies, but investors increasingly wanted clearer evidence of product renewal and progress in artificial intelligence.
Promoting the leader responsible for hardware placed an experienced insider in charge while signalling a change in emphasis. Ternus’s first major product event as CEO, which included Apple’s first foldable iPhone, gave him an immediate opportunity to establish authority in public.
Cook’s move to executive chairman can provide continuity during the transfer. It can also create a risk if the former chief continues to make decisions that belong to the new one.
The arrangement will succeed only if employees, directors and outside partners know where Cook’s advisory role ends, and Ternus’s executive authority begins. A transition is not complete when the new CEO receives the title. It is complete when the organisation looks to that person for decisions.
Tata Shows What Happens When Governance Overtakes the Process
The approaching departure of N. Chandrasekaran from Tata Sons offers a different lesson. In August 2026, Tata Trusts began forming a panel to recommend a successor after Chandrasekaran said he would not seek reappointment when his term ends in February 2027.
The trusts control a majority of Tata Sons, the holding company of a group whose listed businesses span technology, vehicles, steel, hotels, power and consumer goods.
The group has time to make an appointment, but the transition has unfolded amid reported disagreements between Chandrasekaran and Tata Trusts. Tata Sons also adjourned its annual shareholder meeting shortly after the exit became public.
The situation revived memories of the 2016 removal of Cyrus Mistry, another episode in which succession became entangled with the relationship between the operating company and its controlling trusts.
Tata’s size makes a last-minute contest particularly risky. A successor must be able to work with the trusts, the Tata Sons board and the leaders of large listed companies, while making decisions across businesses with very different economics.
The lesson is not that an insider must automatically receive the job. It is that ownership, board authority and the selection process should be agreed before tension at the top narrows the available choices.
As of September 2026, Tata had started the formal search but had not announced a successor. Any discussion of individual contenders should therefore be treated as speculation rather than fact.
Credibility Must Be Earned in Operating Roles
Boards often say they prefer an internal successor, but preference alone does not produce one. Credibility develops when potential candidates receive work that exposes both their strengths and their limits. The most useful preparation usually includes four elements.
First, candidates need control of a substantial business with clear results. Berkshire Hathaway gave Greg Abel responsibility for its non-insurance operations for eight years before he became chief executive in January 2026.
Warren Buffett remained chairman, but Abel arrived with detailed knowledge of a decentralised group containing close to 200 businesses. His appointment was not an attempt to copy Buffett’s public persona. It reflected years of evidence that he could allocate capital and supervise operating companies.
Second, the board should broaden candidates before choosing among them. A leader who has spent an entire career in one function can be highly capable but still lack the range required of a CEO. Moving possible successors across products, regions and customer groups gives directors more evidence and reduces the danger of promoting on reputation. It also strengthens the company if none of those executives ultimately gets the top job.
Third, directors need direct contact with candidates that does not depend entirely on the incumbent’s account. Presentations at scheduled meetings are not enough. Board members should observe executives during strategy reviews, acquisitions, product failures, safety incidents, and periods of weak performance. The important question is not whether a candidate presents confidently. It is whether that person identifies bad news early, listens to challenge and takes responsibility for a decision.
Fourth, the process should retain more than one plausible candidate for as long as practical. A single chosen heir may leave, underperform, or prove unsuited to a change in strategy. However, boards must prevent a long contest from damaging cooperation.
Candidates should receive meaningful mandates and clear performance measures, while the board keeps the decision confidential. Public speculation can turn ordinary disagreements into evidence of a leadership battle and encourage senior executives to protect their position rather than the company.
Internal Does Not Mean Unchanged
The case for an internal successor rests on knowledge and trust, not on preserving every existing policy. Adobe’s September 2026 decision to appoint Anil Chakravarthy shows how a company can select from within while responding to a new competitive threat.
Chakravarthy joined Adobe in 2020, ran its digital experience business, and later took responsibility for global sales and customer support. He succeeded Shantanu Narayen as Adobe faced pressure from artificial intelligence tools and newer design platforms. His background inside Adobe reduced the learning burden, while his previous experience as chief executive of Informatica brought an outside perspective.
Enbridge provides another current example. The Canadian pipeline and utility company named Michele Harradence to succeed Greg Ebel at the end of 2026. Harradence had worked at Enbridge since 2014, led its gas distribution and storage business and helped integrate utility acquisitions from Dominion Energy.
Ebel was due to stay on the board until his retirement and then serve as an adviser for several months. The schedule gave the new chief access to the former one without leaving the transfer open-ended.
The opposite risk is visible at Disney. Bob Iger selected Bob Chapek as his successor in 2020 but returned as CEO in 2022 after the handover failed. Disney then rebuilt the process, placed former Morgan Stanley chief James Gorman in charge of the search, and assessed several internal candidates alongside outsiders.
The board chose parks chief Josh D’Amaro, who took over in March 2026, while defining an end date for Iger’s advisory role. The second process was longer and more formal because the first had shown that naming an insider is not the same as transferring authority successfully.
Founders Should Plan Before the Company Outgrows Them
Leadership succession matters just as much for startups, even though their ownership structures and planning needs differ. A founder may remain the best person to lead the company for many years, but directors and investors should still know who could take charge during an unexpected absence. This preparation becomes increasingly important as the company raises debt, enters regulated industries, expands internationally, or grows into a large employer.
Founders sometimes resist succession planning because they interpret it as a vote of no confidence. Boards can reduce that fear by separating leadership development from a decision to replace the founder.
Hiring a strong finance head, giving a product leader responsibility for revenue, and allowing another executive to manage overseas expansion are useful even if the founder stays. These moves reduce dependence on one person and make the company easier to finance, partner with, and eventually list or sell.
The board must also decide what role, if any, the founder would hold after leaving the CEO position. Founder, chair, product adviser, and controlling shareholder are different sources of influence. Leaving them undefined invites conflict. A new chief cannot be held responsible for results while a predecessor retains an informal right to reverse decisions.
The Announcement Should Be the Final Step
The strongest succession plans preserve stability because they develop leaders through ordinary business decisions, not through a public competition. They give potential successors wider responsibility, allow the board to judge them directly and keep more than one option available. They also establish how the outgoing chief will transfer information, relationships and authority.
Apple, Berkshire Hathaway, Adobe and Enbridge took different routes, but each promoted a leader whose record could be examined before the appointment. Tata now faces the harder task of reaching agreement across a complex ownership structure while its current chairman approaches the end of his term. Disney’s experience shows why even a famous internal candidate can fail when roles and authority remain unsettled.
A board cannot guarantee that the next CEO will succeed. It can, however, avoid making the most important appointment in the company under unnecessary time pressure. CEO succession planning should begin when leadership appears stable, because that is when directors have the freedom to develop people, test assumptions, and make a considered choice.
Stay connected with Business Herald for the latest business news, insights, and updates.
Follow us on Facebook, Instagram, LinkedIn, and YouTube.
Join our growing community on WhatsApp and Telegram for real-time updates delivered directly to you.
