Our 2025 What Directors Think report—conducted in partnership between Corporate Board Member, Diligent Institute and FTI Consulting—reveals that improving or revising C-Suite and board succession planning is one of the key priorities for U.S. public companies this year.
In the annual survey of more than 200 U.S. public company directors, just over a third (34 percent) identified CEO and C-Suite succession planning as a top company priority for 2025, ahead of other pressing issues such as AI adoption (27 percent), workforce planning (26 percent), cybersecurity enhancements (25 percent) and navigating geopolitical risks (10 percent).
Additionally, CEO succession planning ranked third on the list of topics directors wanted to discuss in their next board meeting. Only M&A activity and growth strategy ranked higher.
“Though it should always be top-of-mind in the boardroom,” says Executive Director at Diligent Institute, Dottie Schindlinger, “succession planning is a growing priority right now because steady and focused leadership is essential for companies to execute their growth strategies, which 76 percent of directors told us was a top goal in 2025.”
The succession planning dilemma in 2025
While succession planning is one of 2025’s core boardroom concerns, it’s also seen as one of the most challenging. The report revealed that three in 10 directors see succession planning at the CEO and senior executive level as one of the most difficult aspects of their role, second only to ‘strategy’ in terms of this year’s key challenges.
The data represents a significant increase from the previous year. More than double the proportion of directors cited succession planning as a challenging issue to oversee compared to last year’s survey.
Other concerns were cybersecurity and data privacy (27 percent), although this has notably decreased in its perceived difficulty to oversee this year, as well as capital allocation (25 percent) and enterprise risk management (24 percent).
Executive exits hit record highs in 2024
The report comes following a major spike in CEO and senior executive departures in the past year, with boards viewing this as a significant source of risk. “They view this as something that can completely upend their strategy for the year,” says Schindlinger, particularly in the case of unplanned departures.
In 2024, more than 2,200 CEOs stepped down from their roles, a 16 percent increase on the previous year and the highest number on record.
Likely impacted by factors such as heightened economic and political uncertainty, pressure from activist investors and advancements in technologies such as AI, the first quarter of 2024 alone saw 622 CEO departures, a staggering 49 percent hike compared to the same period in 2023.
High-profile companies such as Boeing, Nike and Peloton have all experienced CEO departures in the past year, with this trend underscoring the evolving challenges and expectations faced by corporate leaders—and indeed, why succession planning is such a critical concern.
Boards struggle to get succession planning right
Many directors admit their CEO succession planning processes aren’t quite up to scratch. While more than half rate them as good or better, only around 1 in 5 (21 percent) consider their succession planning process to be ‘excellent’.
Meanwhile, 17 percent admitted their current succession planning process is “poor,” far more than those who said the same about important aspects like their board’s understanding of long-term strategy and its ability to oversee the risk management plan. Overall, boards graded their succession planning processes lower than every other element of board practice.
So, the question is: how do boards improve their succession planning processes?
In a special 150th episode of The Corporate Director Podcast, Diligent Institute’s Dottie Schindlinger spoke to Annalisa Barrett, senior advisor at KPMG, about the growing importance of CEO succession planning, focusing on five key aspects board members should know about succession planning in 2025.
Firstly, it’s important to outline a process for all types of transitions. The three most common scenarios are long-term planned transitions, short-term unplanned transitions, and ‘here today, gone tomorrow’ emergencies. Clear processes should be outlined for each different eventuality.
It’s also essential to involve your current CEO in the succession plan. They should understand that the process is not a personal affront but a drive to ensure the company is in good hands in the event of their departure.
Moreover, communicate the succession plan with investors and key stakeholders, fostering greater board and governance collaboration and more confidence from investors.
Next, delegate succession planning to the right people, ensuring the individuals involved are capable of successfully executing the process.
Finally, and perhaps most importantly, understand what type of CEO your company needs, considering upcoming challenges and defining what the business requires for future success rather than looking in the rearview mirror.
As investor expectations rise and leadership turnover accelerates, boards cannot afford to treat succession planning as an afterthought. With foresight and clear alignment, succession is driven by a well-thought-out strategy, not a scramble. Find more insights in the 2025 What Directors Report or in Diligent’s guide to CEO succession planning.
