The Succession Crisis Extends Beyond Small Business
September 30, 2026 – Succession planning has become one of the most pressing leadership issues facing boards as a growing number of senior executives move closer to retirement. For executive search firms, that is creating increased demand for earlier engagement, deeper assessment of internal talent, and more deliberate planning around critical leadership transitions.
The challenge is especially acute when multiple members of the C-suite are approaching departure at the same time. In those situations, boards that wait until a vacancy is imminent can find themselves with compressed timelines, fewer viable options, and greater organizational risk, underscoring the importance of treating succession as an ongoing governance priority rather than a last-minute search assignment.
That urgency is becoming harder to ignore as retirement pressures begin to converge with leadership continuity risks at some of the nation’s largest organizations. Coverage of the baby boomer succession wave has focused largely on small business owners approaching retirement without a transition plan, explained a recent report from Slayton Search Partners’ Stuart Smith. Roughly 12 million businesses representing nearly $10 trillion in assets are expected to change hands over the next decade.
A parallel crisis at the top of major organizations has received far less attention, with consequences proportionally larger and far less often discussed. A recent analysis found more than one-third of S&P 500 firms sampled had a CEO and CFO simultaneously sitting in the retirement window with no clear succession plan disclosed. “That is not a small business problem,” the Slayton Search Partners report said. “It is a governance failure at scale.”
The Same Paralysis, Higher Stakes
Regardless of context, succession planning failures mirror the same pattern, according to the Slayton Search Partners report. “They are treated as a future priority until circumstances make them an immediate one,” it said. “Boards and owners alike approve the logic of proactive planning in the abstract and defer execution in practice. The urgency never quite arrives until the departure does.”
Stuart T. Smith is a senior vice president and principal with Slayton Search Partners and is a key member of the financial services practice. He brings extensive experience of retained search advising commercial banking, private banking, fintech, and real estate clients at a national level. His search experience spans more than 20 years with global retainer firms and boutiques. Mr. Smith has provided key senior management talent, including board directors for community and regional banks, real estate firms, fintech, and consumer lending clients.
For ownership transitions, that deferral often results in closure rather than transfer, with wealth not passing forward and opportunities not created, the Slayton report noted. The study explained that for leadership transitions at the executive level, it results in a process managed under pressure rather than by design, with searches compressed and options narrowed before they begin.
Related: Why Succession Planning Is Critical to Reducing Leadership Risk
“When the CEO and CFO are simultaneously approaching a transition horizon, the board has an obligation to understand the specific plan,” the report continued. “One that is funded, actively managed and tied to a timeline that reflects reality. Too often, the succession conversation stops at acknowledgment.”
“The organizations that navigate leadership transitions most effectively are not the fastest to respond when a vacancy occurs,” Mr. Smith said. “They are the ones that treated succession as an ongoing discipline and priority.”
The Window Is Narrower Than Organizations Realize
The gap between acknowledging succession risk and acting on it is where most organizations lose time they cannot recover, according to the Slayton Search Partners report. “Building a succession plan is a multi-year process of understanding what a role will require, assessing whether capability exists internally and engaging external perspective early enough to act,” it said. “Organizations waiting until six months before a planned departure have already narrowed their options considerably.”
Organizations that manage this well share one characteristic: Slayton says that they treat succession as a standing agenda item rather than a response to circumstance. They know which seats are approaching a transition horizon, maintain an honest assessment of internal readiness and engage external perspective before urgency forces the question.
“The most expensive succession searches are not the ones with the most complex candidate requirements,” Mr. Smith said. “They are the ones that began six months too late. By then, the options have narrowed and the timeline has not.”
Related: Private Equity Faces Growing Leadership Succession Risks
Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor – Hunt Scanlon Media
