The Art of the CEO Handoff
New Korn Ferry research finds a performance gap between well-managed and poorly staged CEO transitions. How to manage public messaging to build confidence.
Key Takeaways:
- New Korn Ferry research shows that proper succession planning can create a market advantage for firms of nearly 4 percentage points.
- Making succession planning a regular, ongoing process can help smooth transitions with stakeholders.
- Though 60% of directors say succession planning should be ongoing, only 17% of boards review them on a quarterly basis.
CEO Succession Planning: Why Boards Need to Choreograph the Transition
The board was taken aback by the unexpected news that the CEO would be departing. But they had some time to prepare: The CEO gave them three months’ notice. Luckily, the directors believed their designated successor would be an appropriate pick. Their new challenge? How best to choreograph the transition announcement so that investors and employees would remain confident.
Succession staging is no minor concern. A new report on CEO-succession choreography by the Korn Ferry Institute shows that a properly managed succession announcement can be associated with a gap in market performance of 3.8 percentage points between companies that managed successions well and those that didn’t.
The researchers studied CEO transitions at more than 3,600 S&P global large- and mid-cap companies, identifying 411 that appointed new CEOs during 2025. KFI then examined company announcements, filings, and media coverage related to each transition, and tracked stock performance for six months afterward. They found that 53% of firms announced the successor before the departing CEO left, 24% announced the successor on the same day, and 23% didn’t name the successor until after the old CEO had departed. Turnover preparation therefore varied quite a bit, but the different results of the three approaches, as measured six months later, were striking: Companies that announced the successor early beat their industry benchmark by 1.1%, while companies that announced belatedly fell short by 2.7%.
“Done well, CEO succession announcements should feel less like breaking news than the culmination of a story everyone already understands.”
But experts say the takeaway isn’t simply to announce the planned successor as soon as possible. “Earlier isn’t always better,” says Jane Edison Stevenson, global vice chair of board and CEO services at Korn Ferry. Instead, she says, “It’s about having a strategic plan that builds confidence and creates a graduated entry.” Succession choreography is an exercise in setting expectations: Boards can use the transition period to introduce a successor in stages, explaining why that leader fits the company’s next chapter and giving investors and employees time to absorb the change. Done well, the formal announcement should feel less like breaking news, Stevenson says, than the culmination of a story everyone already understands. “Succession choreography is like setting the table,” she says. “Yes, the food is important, but we have to think about the place settings and the room.” And that work can’t unfold properly if an underprepared company is scrambling to replace a departing CEO.
An adept incoming CEO can also help the choreography along. In fact, the CEO skills needed for the current moment are changing, experts say, because of how profoundly today’s communication channels—from social media to traditional news to the influence of AI—shape public perception. “Learning agility, courage, resilience, and integrative thinking all matter—but EQ is becoming even more important,” says Tierney Remick, vice chair and global co-lead of board and CEO services at Korn Ferry. Experts note that high emotional intelligence can help a leader shape the narrative both within the company and in external markets. In the past, strong CEOs could sometimes create excellent value while remaining relatively poor communicators. That’s harder at a time when employees, investors, and the sprawling information ecosystem can begin forming a story about a new leader almost instantly. “Being a CEO today means you’ve got to be able to dance,” says Stevenson. “You’ve got to manage perception and get a buzz in the market.”
Although successful CEO succession requires advance planning, AI and other disruptions are changing companies’ needs so rapidly that today’s ideal candidate may not work next year. That means that consistently reviewing succession planning is key—yet Korn Ferry’s recently released 2026 Board and CEO Survey reveals that while 60% of board directors believe that succession planning works best when treated as an ongoing process, only 17% of boards review their succession plans quarterly. And it’s not just CEOs that boards should be thinking about: Regularly assessing the broader executive pipeline is also crucial. “CEO succession and C-suite succession are one integrated ecosystem,” says Remick. “Boards need to be looking regularly at the talent pipeline, and we’ve observed that high-performing companies sit down with their board twice a year to review all of their talent, including CEO, C-suite, and C-2.”
Ultimately, experts say, the smoothest transitions are built long before anyone drafts the press release. Regularly thinking through the leadership pipeline and how transitions will be communicated can help boards orchestrate an ideal public reception. But if a departure forces the board into a scramble, much of that opportunity can be lost. “You don’t want to have to appoint someone in an emergency,” says Stevenson. “But you can avoid it if you govern correctly all along.”
Learn more about Korn Ferry’s CEO Search and Succession capabilities.
