Executive leadership is integral to the prosperity of any corporation. The right chief executive officer can stimulate a lackluster organization to new heights, while a mediocre CEO is lucky to maintain the status quo. The selection, development, and retention of the right leader—one who fulfills the needs of the organization— is the single most important responsibility of an organization's board of directors. It is the board of directors' obligation to identify potential candidates, assess their capabilities and shortcomings, ensure their continued commitment, and recognize when it is time for a changing of the guard. The board should seek a CEO who fits the corporation's current culture or that which it is moving towards, understands its business strategy, and inspires others to fol-low where s/he leads. Moreover, the CEO succession process itself should be carefully tailored to reflect the organization's current business strategy and vision. This must be a flexible process that changes with the company's focus and direction.
This report examines the executive succes-sion process in general, with a special focus on CEO succession. It begins by outlining core succession principles and providing examples of questions a board of directors should ask when planning the succession process. It then discusses warning signs that signal a board has not done its job effectively and specifies the responsibilities of a board during the succession process.