Ineffective Transition & CEO Succession Planning are resulting in the greatest erosion  🔨 to shareholder value 💸

Ineffective Transition & CEO Succession Planning are resulting in the greatest erosion 🔨 to shareholder value 💸

Russell Reynolds Associates has recently analyzed the state of CEO succession planning and transitions using the example of U.S. Bank Boards & their CEOs

As always, I've done the reading & summarizing on your behalf, so you can save your most precious ✨ asset, namely your time ⏳:

Key insights

1. The U.S. banking sector has demonstrated remarkable resilience over the past 18 months with a sense of optimism as the industry heads into 2025

2. Despite the easing of some traditional systemic & cyclical risks, a significant threat remains under-appreciated by many U.S. banks

👉🏼 Inadequate C-suite succession and transition planning, particularly for CEOs

3. RRA's analysis reveals that nearly half! of these institutions failed to implement a thoughtful & pragmatic approach to succession & transition planning

4. CEO succession and transition is a crucial governance duty for the hashtag#board & a key responsibility for the current CEO.

❓Yet, why is it frequently neglected, posing significant risks to the hashtag#board , employees, shareholders, & customers?

5. Successful tenures of established CEOs often obscure the urgency & corporate discipline required for effective succession planning

6. Additionally, the local nature of regional banks places a higher value on communal relationships & reputational history, often resulting in a "cult of personality" that hinders essential discussions

7. 😱 Only 18% of U.S. banks with assets under $100 billion have identified a CEO succession candidate along with a timeline & transition plan

In summary: The financial repercussions of inadequate CEO succession planning are evident. According to the Harvard Business Review and as cited in hashtag#MasteringExecutiveTransitions "poorly managed CEO and C-Suite transitions in S&P Global 1500 companies lead to nearly $1 trillion in lost market value each year"

So, how can banks and other organizations guarantee smooth & effective CEO leadership transitions?

💡 Executive Transition Coaching is one of the most effective ways to support incoming CEOs

But don't take my word for it, take it from a recent financial services (FTSE) CEO client of mine:

👉🏼 "The transition coaching has really helped me to think through and understand context, leadership, and people, materially better. The coaching has helped me to further mature in my relationship management, decision making and people leadership. Our work has been tremendously useful and I’m confident that it will continue to remain useful both for me and for my executive leadership team.”