FT Feature: Why boards can no longer wait to pick their next CEO

JPMorgan’s move last month to elevate two senior bankers to co-president roles was another step in one of the slowest succession contests on Wall Street.

Planning for life after Jamie Dimon has been taking place at the US bank for at least a decade, resulting in high-level executive jostling and some dramatic departures of sidelined contenders.

Few boards have the luxury of such lengthy succession planning. Michael O’Leary last month extended his contract running UK airline Ryanair to 2032; if fulfilled it would take his term to almost 40 years. But the global trend is for shorter chief executive tenures and more rapid turnover — shifts that are forcing company boards to rethink how they prepare for their next leader.

Headhunters say it is no longer enough for companies to cultivate a single heir apparent. They need to be constantly pursuing and nurturing a “strong bench” of potential internal successors, treading lightly enough to avoid setting off a Hunger Games-style rivalry, while scouting the market for potential external candidates.

This means spotting contenders for the top role early, focusing on their professional development and working to multiple possible timeframes.

In 2025, 234 chief executives of publicly listed companies vacated their offices globally, up 16 per cent year on year, as churn in the top corporate job hit a record for the second year running, according to Russell Reynolds Associates’ global CEO turnover index.

“If I’m a chair, I have to think that there is a world where the CEO goes tomorrow, there’s a world where the CEO goes in two years and a world where the CEO goes in five,” says Mark Freebairn, partner and head of the board, chair and non-executive director practice at search firm Odgers. “And so I need to have a constant evolution of succession within my leadership team that could answer any of those three questions.”

In the first quarter of this year 77 new CEOs were appointed globally — the highest total for the period in the nine years it has been tracked.

One experienced FTSE chair says having an open conversation about how long a new chief executive anticipates doing the job and their objectives should be one of the first things a chair does. “It’s a very non-threatening conversation at that point because the person’s just been appointed . . . Doing that and then having a continuing dialogue between the chair and the CEO helps quite a lot because it takes the tension out of it, if it starts at the beginning.”

Emma Combe, who leads the UK board practice for Russell Reynolds Associates, says while succession may previously have been “more reactive”, faster turnover means boards’ searches must now be “proactive and ongoing”.

Boards should start with “what” they require for the role rather than “who”, recruiters advise. They should consider the challenges a new chief executive might face in one, two, three and four years’ time, says Dominic Schofield, chair and managing partner of the board and CEO practice for the UK at Korn Ferry.

This gives directors a “detailed profile” of the kind of person the business might need, which they should refresh every six months, he advises. Once potential internal candidates are identified, companies should offer support to strengthen their executive experience, skills and capabilities.

Nominations committees should be thinking about “giving individuals the different exposure that they might need, the different responsibilities, in addition to supporting their leadership style”, says Combe.

To minimise infighting among senior colleagues “we’re starting to talk a lot more about executive progression and really avoiding the word succession until it becomes a topic that maybe is much more widely known”, she adds.

The FTSE chair says there will be discussions with contenders about their leadership potential and ambitions alongside efforts to round out their experience, for example in a different geography or division.

This approach is on display at JPMorgan, which, with around three years left until Dimon is expected to step down as chief executive, has narrowed the race to succeed him to two candidates — Doug Petno and Troy Rohrbaugh — who had jointly run the commercial and investment bank.

Rohrbaugh was appointed head of JPMorgan Chase’s consumer division, replacing Marianne Lake, who will now leave. The move will enable JPMorgan to test Rohrbaugh’s credentials in consumer banking with sufficient time before Dimon is expected to move on — although few would be surprised if the chief executive stayed on to outlast the two latest potential successors.

Boards are taking a similar approach to external candidates — with chairs looking for talented executives who could be ready as immediate successors and those who might be a slower burn. Headhunters will provide lists of potential future contenders with areas for development. This can help if the business wants to hire someone early in a different role, and put them on the path to chief executive, says Freebairn.

One smooth handover was at pharma company GSK, says Kate Lye, founder and chief executive of leadership adviser The Savoir Group. Emma Walmsley announced last year that she would step down, with GSK immediately naming her successor as Luke Miels, who had joined in 2017 as global head of pharmaceuticals from rival AstraZeneca. There was no succession battle and an orderly transition. Walmsley had spun off the consumer health division to focus GSK back on oncology — and Miels had been groomed to deliver its pipeline. Last month he announced the $10.6bn acquisition of US cancer biotech Nuvalent.

It was a case of “two really different stages in strategy . . . and saying, ‘have we got the right leader for this next stage?’,” says Lye.

“have we got the right leader for this next stage?’”

A longer runway into the top job can also help candidates build soft skills that are needed to withstand the pressure of being chief executive. “It’s the personal side to it, as well as the technical side of it,” adds Lye, “and I think smarter businesses are doing both.”

Egon Zehnder takes a two-pronged look at potential chief executive candidates, says Gizem Weggemans, the consultancy’s global head of services. One is their “outer game” — skills such as experience, commercial and operational judgment — and secondly their “inner game” — self-awareness, self-management, adaptability, resilience and identity.

“If we’re over-indexing on either one of them . . . we’re really not doing right by the organisation . . . because the future CEO is going to need to manage complexity, bordering on chaos frankly, in a way that people haven’t before,” she says.

The FTSE chair cautions that even with greater planning and careful thought, succession “is not a scientific process”. “Sometimes you make a mistake . . . Things don’t work out as you hoped and you have to then make a second change.”

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