ANALYSIS · Succession

CEO Succession Planning: What Director Surveys Reveal About the Readiness Gap

Succession has climbed the board agenda, yet director surveys from Spencer Stuart, NACD and Russell Reynolds show many boards unsure they could name a ready internal successor.

Rendal Post Analysis Desk · Published October 2, 2026

CEO succession planning has climbed the board agenda, but the director surveys we reviewed suggest that attention has not yet turned into readiness. In the 2025 Nominating/Governance Chair Survey cited in Spencer Stuart's 2025 U.S. Board Index, CEO succession ranked second among committee agenda items, at 60%, a rise of 10 percentage points over the prior year (Spencer Stuart Board Index). In a 2025 Russell Reynolds study of more than 1,000 directors, only half said they could appoint an internal successor if one were needed tomorrow (NACD Directorship). In our reading, the distance between those two findings is the real subject for any owner or chief executive thinking about who comes next. Below we set out what the data show and what a mid-sized company can take from them.

Turnover is picking up again

Challenger, Gray & Christmas, an outplacement and executive coaching firm, counted 186 CEO exits at U.S. companies in August 2026, compared with 120 in July and 146 in August 2025 (Challenger, Gray & Christmas). The year as a whole has been calmer: the firm recorded 1,226 exits in the first eight months of 2026, an 18% decline from 1,504 in the same months of 2025 and the lowest January-to-August total since 2022 (Challenger, Gray & Christmas). Andy Challenger, the firm's chief revenue officer, said exits rose as "companies assess leadership ahead of the final quarter of the year" (Challenger, Gray & Christmas).

Two details in the August report bear directly on succession. CEOs whose interim periods ended accounted for 22 exits, the most of any month in 2026, which the firm tied to the resolution of a wave of interim appointments made during 2025 (Challenger, Gray & Christmas). Twelve of the August departures were founders of the companies they ran, bringing founder exits for the year to 126 (Challenger, Gray & Christmas). In our reading, an interim appointment is what a board uses when a permanent choice is not ready, although the report does not say why those interim leaders were named. Founder exits, which the firm links to events such as capital raises and generational transitions, are, as we read it, the case closest to mid-sized and family-owned companies.

Where insiders are winning

Among the largest listed companies worldwide, the picture was steadier. Rusty O'Kelley, who co-leads the Global Board & CEO Advisory Practice at Russell Reynolds Associates, and Emma Combe, who leads its UK Board Practice, reported that 101 CEOs left their roles across the major indices the firm tracks in the first half of 2026, down from 118 a year earlier and the lowest first-half figure in its nine years of tracking (Harvard Law School Forum on Corporate Governance). Appointments held at 131, close to the nine-year first-half average of 129 (Harvard Law School Forum on Corporate Governance). Average tenure among departing CEOs was 9.0 years, against 6.6 in the first half of 2025 (Harvard Law School Forum on Corporate Governance).

The composition of those appointments is the more useful signal. In the S&P 500, 88% of incoming CEOs in the first half of 2026 were internal appointments, the highest first-half share the firm had recorded (Harvard Law School Forum on Corporate Governance). Across all tracked indices, 30 of the 131 new CEOs, or 23%, had already run a public company (Harvard Law School Forum on Corporate Governance). The authors read the overlap as evidence that some boards are building paths that give them both an insider and proven CEO experience, and they wrote that internal succession "depends on sustained investment in leadership development, exposure, and readiness" (Harvard Law School Forum on Corporate Governance). That suggests, as we read it, that a preference for insiders is only as good as the bench behind it.

Where the readiness gap shows

Several surveys point to that bench as the weak spot. In NACD's 2024 Public Company Board Practices and Oversight Survey, fielded in May 2024 among 247 public company board members, 30% said their board had no successor identified should the CEO leave tomorrow, and another 10% were unsure (NACD Directorship). Respondents named maintaining a strong internal pipeline (58%) and assessing internal candidates' readiness (40%) as the hardest parts of the work, according to a summary by Heather Kierzek, assistant editor of Directorship (NACD Directorship). In the same survey, 71% had identified an interim CEO for an emergency over the prior year (NACD Directorship).

Spencer Stuart's 2024 pulse survey, which polled 797 directors serving on public and private company boards in the U.S., found the same tension (Spencer Stuart). A little more than 20% expected a CEO transition within 18 months and another 30% within three years, yet 45% worried they would not have even one internal candidate ready, a share that rose to 66% for two or more candidates (Spencer Stuart). Some 37% said they had delayed CEO transitions because internal candidates were lacking (Spencer Stuart). Only 49% said they had discussed emergency succession planning in the previous 12 months, which the firm said may partly reflect that time frame and may also indicate that many boards are not reviewing their plans regularly (Spencer Stuart).

The Board Index adds a measure of effort. In the 2025 chair survey, 84% of nominating/governance chairs reported a formal emergency plan or an identified interim successor, but just 55% said their board was actively supporting CEO succession activities, and 69% reported spending 10 hours or less a year on succession-related work (Spencer Stuart Board Index). Spencer Stuart's own summary was that "awareness doesn’t always translate into action" (Spencer Stuart Board Index). These surveys use different samples, years and questions, so we do not combine them into a single rate; in our reading, they agree on direction rather than on size.

How boards organize the work

For boards that want a model, the Russell Reynolds study offers benchmarks, summarized in NACD Directorship by Dean Stamoulis and PJ Neal of the firm, which is a financial supporter of NACD (NACD Directorship). Among directors with firsthand experience of a CEO succession effort, 20% said the full board handled it, 17% said a special committee was formed for the purpose, and 6% said an informal working group of directors took it on (NACD Directorship). When it came to the final choice, directors said they considered a median of one internal candidate and a median of two external candidates (NACD Directorship). The authors argued that long-term plans should ideally run over three or more years, and directors using longer timelines were significantly more likely to say they felt adequately informed about the learning and development plans of internal candidates and to report adequate exposure to those candidates before the selection (NACD Directorship).

Development practices showed no clear pattern in the Spencer Stuart pulse survey. Half of its respondents said possible successors received executive coaching, 46% said top talent was promoted into broader roles, 38% said a board member mentored internal candidates, and 14% chose none of the listed options (Spencer Stuart). A couple of respondents also raised the problem of strong insiders who, in one director's words, "don’t want the responsibility" (Spencer Stuart).

The handover itself is another gap. Only 48% of respondents said their boards clearly defined and communicated the outgoing CEO's future role, and 22% said their emergency succession plans were refreshed once a new CEO had been selected (Spencer Stuart). Spencer Stuart noted that the departing leader may still be the public face of the company, particularly where a founder is involved (Spencer Stuart).

What to do with this

The board surveys come mostly from large and public companies, and the Spencer Stuart pulse survey is the only one that says it includes private boards (Spencer Stuart), while the Challenger turnover counts cover U.S. companies generally, so we treat the figures as a reference point for a mid-sized owner rather than a benchmark to match. With that caveat, our reading of the sources points to a short agenda. First, write down who steps in if you are unavailable tomorrow; the NACD figure of 30% without an identified successor (NACD Directorship) suggests, in our reading, that the step can be missed even at public companies with formal boards. Second, set a horizon of several years for the permanent choice, as the Russell Reynolds authors recommend, and give the board or your advisers direct exposure to the people who might succeed you.

Third, develop more than one candidate. The Russell Reynolds authors wrote that the strongest plans give boards "genuine choice between credible internal and external candidates" (Harvard Law School Forum on Corporate Governance), and in Spencer Stuart's 2024 survey 66% of directors doubted they would have two or more internal candidates ready (Spencer Stuart), which suggests, in our reading, that a choice among ready insiders cannot be taken for granted. Fourth, decide in advance what the outgoing leader will do after the handover, and revisit the emergency plan as soon as a new CEO is named. One director in the Spencer Stuart survey framed the goal as "not hiring a CEO for what was, but instead a CEO for what needs to be" (Spencer Stuart). In our reading, that is the test any succession plan should be held to, and it is one an owner can apply long before a transition is announced.