Careful succession planning is crucial for companies to maintain valuation, employee morale, and retention of top talent. A recent study suggests strategic timing in CEO transitions—specifically, starting new leaders at the beginning of the fiscal or calendar year—can maximize value creation. The research highlights the substantial costs associated with poorly executed succession plans, underlining the need for deliberate policies that support incoming CEOs in their initial phases. Such measures not only safeguard shareholder interests but also stabilize the workforce during transitions.
Boards that strategically start new CEOs at the beginning of the fiscal year can enhance their ability to drive value and ensure smoother transitions.
Successful succession planning is essential for preserving shareholder value and preventing talent loss during CEO transitions, which can be costly and disruptive.
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