Laroze Partners · Conviction · Governance & Succession · July 2026

Executive departures are reaching record highs, and most boards of directors discover the question of succession the very day they need it. Yet an improvised succession destroys value, massively. The real obstacle is not technical, it is human. And anticipating, rather than replacing in an emergency, is precisely where a company's continuity is at stake.

The subject in a few figures

The signal

Turnover at the top is accelerating. In 2025, executive departures reached a record high among US listed companies, the highest in more than twenty years. Pressure from activist investors has never been stronger, and it has led to a record number of resignations.

What is new is that these departures are no longer just quiet career endings. An increasing share occurs mid-term, driven by pressure on performance, burnout, and evolving governance expectations. They are now also striking high-performing companies. In other words, no board can view succession as a distant matter anymore.

The fire extinguisher reflex

Yet, most boards treat succession like a fire extinguisher hanging on the wall. No one has checked it in a long time, and it is assumed it will work when the day comes. This assumption is costly.

The figures are clear. Only 35% of organizations have a formalized succession process, and 40% report having no viable internal candidate to replace their executive if they left tomorrow. Most boards are much better at organizing a fundraise than managing a leadership crisis. They prepare the entry of capital methodically, and leave executive continuity to chance, which is nonetheless their most critical responsibility.

The cost of improvisation

This lack of anticipation has a price, and it is quantifiable. Companies forced to push their executive out the door lose an average of $1.8 billion in shareholder value compared to those that prepared the transition. Across the S&P 1500, poorly managed transitions destroy nearly $1 trillion in value annually. And 40% of new executives fail to meet expectations in their first 18 months.

I see this cost materialize on the ground. We are regularly retained by organizations that have anticipated nothing. The board wants an external solution, and fast, because internal power struggles make it impossible to appoint anyone internally. The individual then arrives in a house that was not expecting them, and three scenarios repeat themselves. They try to impose themselves through the sole force of their taking office. Or they import their own CFO, HR director, or sales director to surround themselves with already acquired support. Or, eighteen months later, it is a bitter failure, and everything starts over.

Each time, the value destroyed far exceeds what a serious preparation would have cost.

The real obstacle is human

If boards anticipate so little, it is not out of incompetence. It is because the subject is uncomfortable. Raising the question of succession can seem like signaling a lack of confidence in the current executive, and many directors prefer to avoid it as long as there is no urgency. This awkwardness is no longer sustainable.

The other mistake is confusing a name with a successor. Having a prospective person on a list does not mean having an actual successor ready. Studies are clear: a potential successor often needs 12 to 24 months of targeted preparation before assuming the position with reduced risk. A name without preparation is not a solution, it is an illusion of a solution, which reveals itself at the worst possible moment.

Yesterday's architect is not tomorrow's

Lastly, there is a question of judgment that succession forces us to ask. The leader who led the company to its current stage is not necessarily the one who will lead it to the next step. The one who transitioned a company from one model to another is not necessarily the right profile for the cycle that is beginning.

Succession is precisely the moment when this judgment arises. It is not about finding a clone of the outgoing executive, but about defining the profile the company will need tomorrow. And it does not concern the number one slot alone. The entire leadership pipeline must be prepared, because a transition at the top always destabilizes the levels supporting it.

What preparation really requires

Preparing a succession has nothing to do with replacing an executive in an emergency. It is deep work, which begins long before any candidate search, and it is often where a lasting relationship of trust with a client starts.

This relies first on trust and confidentiality. The board must be able to open up its most sensitive aspects to its partner: its vision, its ambition, its governance, its key people in the executive committee, and the real context to be taken over. Nothing solid is built without this relationship.

Next comes a real diagnosis, a strategic mission in its own right. It is not about duplicating the existing position, but about outlining the future need, the one that will serve the company's development after the succession. This is often the opportunity to deconstruct and rebuild current organizational charts.

Only then do we align everyone on a clear roadmap, organize the internal handovers of power, and the question of the candidate is finally posed in the right terms. Promoting from within, or looking for the resource externally. With, each time, the market intelligence that allows telling the board if its heir apparent actually holds up to comparison with what exists elsewhere. This perspective, preparing rather than replacing, is what distinguishes a successful succession from a suffered succession.

Succession is decided before it is urgent

A succession is not an event to be managed when the day comes. It is an ongoing discipline of governance, worked on in calm times, long before a crisis. Boards that prepare for it, that dare to name the subject and build a proven talent pool, go through transitions strengthened. Those who improvise pay the price in destroyed value and lost years.

Courage here consists of addressing the question before it becomes pressing. Anticipating the succession of one's executives is not an admission of weakness. It is one of the marks of a board doing its job.

Laroze Partners — Healthcare & Pharma · Medtech · Retail · Tech & Services · Consulting Executive Search Firm

Sources: Challenger, Gray & Christmas · PwC Strategy and Harvard Business School on the cost of forced transitions · Harvard Business Review on value destruction and the failure of new leaders · Conference Board and Semler Brossy on board preparedness · Spencer Stuart and Korn Ferry on executive transitions. This article reflects Laroze Partners' practitioner reading.