Egon Zehnder Survey: U.S. Confidence Lags in CEO Succession Planning

December 9, 2009 – Recent Fortune 500 CEO resignations are putting the spotlight on CEO succession planning, according to Egon Zehnder. Yet, findings of an Egon Zehnder survey of senior executives reveal none of the top level U.S. executives taking the survey believe their companies are best in class or highly successful at meeting the challenge of succession planning. Nearly one-half (47 percent) believe their companies are average at succession planning and the remaining 53 percent felt their companies had failed to build an effective succession plan. "The global financial crisis has resulted in high CEO turnover. This fact combined with the recent SEC announcement that would allow shareholders to challenge the Board to disclose more information about plans for CEO succession, makes developing a succession plan even more critical," said George L. Davis Jr., a member of Egon Zehnder’s executive management committee and co-managing partner of the global board practice. The survey is based on responses to online interviews with 1,092 top managers in nine countries representing all industries. Eighty percent of top French managers indicate that they are not successful at leadership succession planning and 71 percent of respondents in the U.K. indicate that they are only moderately successful at leadership succession planning. In contrast, 70 percent of top managers in Germany believe they are successful at planning for leadership succession (40 percent very successful and 30 percent moderately successful). In India, 57 percent (28 percent very successful and 29 percent moderately successful) of top executives believe that they are successful at succession planning. In Australia, this number is 44 percent. "At a time when CEO succession continues to dominate the headlines, it is clear that planning for leadership change is critical to the success of a corporation," said Justus O'Brien, head of the U.S. CEO succession practice at Egon Zehnder. "Our findings shed light on how corporate America needs to be better prepared for both planned and unplanned changes in top leadership."