Succession Planning, Emerging Technologies Top of Mind for Public Company Directors, Survey Finds

Amid great governmental, geopolitical, and technological change and uncertainty, businesses need leaders to steady the course now more than ever. To help ensure consistent stewardship, companies of all shapes and sizes should plan ahead. However, public companies need to strengthen their development of long-term CEO succession strategies for any planned or unplanned departures, according to the 2024 NACD Public Company Board Practices and Oversight Survey report.

The survey, in the field from May 1 to May 28, 2024, collected responses from 247 public company board members to provide benchmarking data to help improve governance practices. In addition to succession planning concerns, the survey found that there is a misalignment between public company boards and management on the speed at which transformative technology can be adopted, even though directors understand the impact of these technologies on their organizations’ growth strategies.

Below are the key insights from the report.

Confidence in Board Leadership and CEO Succession Planning

Growing uncertainty about the economy, digital transformation, and other risks within the current business environment requires steady leadership in the boardroom and in the C-suite. Survey respondents are confident when it comes to finding their next board leader (i.e., board chair, lead independent director). They believe a standing director could fulfill the board chair role (85%) and the lead independent director role (92%) if there was a sudden departure.

However, nearly one-third (30%) confess that the board does not have a successor identified, and 10 percent are unsure if they have a successor identified, should the organization’s CEO leave tomorrow. Respondents admit that maintaining a robust succession pipeline of internal talent (58%), effectively assessing readiness of internal candidates (40%), and developing a long-term plan for succession (37%) are the most challenging aspects of CEO succession planning for the board.

Nonetheless, the survey found several common CEO succession practices across public company boards. Over the past year, many respondents discussed long-term succession planning (75%), identified an interim CEO in case of an emergency (71%), assessed a pipeline of internal candidates (58%), and discussed the current CEO’s role and expectations in CEO succession planning (44%).

Disconnect on Transformative Technology

As companies ponder the ethical use of artificial intelligence and other emerging technologies, nearly all public company respondents are either moderately confident (47%), very confident (29%), or extremely confident (11%) in their own understanding of the implications of these technologies on their organizations’ growth strategy. However, there is some disconnect between the board and management on technology-related issues. Respondents note that while the board and management are strongly aligned on the direction of the company’s technology strategy (51%), they are only somewhat aligned on the speed with which to exploit new technology-related opportunities (52%) and the company’s appetite to take technology-related risks (57%).

To address this, public company directors prioritize cybersecurity (84%), the linkage between technology and overall business strategy (52%), digital transformation initiatives (32%), and data privacy and governance (30%) in their discussions with management.

Read the complete article in the winter 2025 issue of Directorship.

Access the full 2024 NACD Public Company Board Practices and Oversight Survey report here.

Heather Kierzek is the assistant editor of Directorship.