CEO turnover is accelerating in 2025 — and it’s not primarily driven by poor corporate performance.
New research from The Conference Board, Egon Zehnder, and Semler Brossy indicates that high-performing organizations are now almost as likely to undergo a CEO transition as low-performing organizations. In 2025, turnover among CEOs of S&P 500 companies in the first three quartiles of performance reached 12%, almost equaling the performances of the last quartile (14%).
This marks a drastic change from the previous year, when the difference between the two groups was 7% versus 18%.
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At the same time, CEO departures are increasing. The succession rate rose to 12.5% in 2025, up from an all-time low of 9.8% in 2024 and 12.2% in 2023. While some of this reflects a return to historical numbers, it also stems from persistent macroeconomic volatility, changes in required leadership skills and the increase in externally hired CEOs.
Notably, the rate of forced exits fell to 15.2% compared to 16.3% in 2024 — the first drop since 2020 — suggesting that most transitions are not a reaction to crises or poor performance. These are conscious actions by boards to proactively deal with succession.
Taken together, these trends indicate a shift in both high- and low-performing companies.
For the most forward-thinking organizations, this shift could represent a fundamental transformation in how boards are approaching leadership continuity.
By 2025, boards may have used CEO succession not just as a corrective measure, but in many cases as a strategic lever to better prepare companies for a rapidly changing and unpredictable future shaped by disruptive technologies, shifting geopolitical norms, and evolving stakeholder pressures.
Factors influencing CEO succession
The rapid change, volatility and unpredictability facing companies in 2025 have influenced succession plans in interconnected and subtle ways:
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1. Previously postponed CEO transitions are being completed
The recent increase in departures reflects both natural leadership cycles coming to an end and the implementation of delayed transitions.
In 2024, the average tenure of CEOs leaving their roles was 7.4 years — a record low — as longtime leaders delayed their departures to guide companies through post-pandemic volatility and macroeconomic uncertainty.
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By 2025, the average tenure of CEOs who have left their positions has risen to 9.3 years as these leaders complete their long-planned transitions.
Because many of these CEOs were experienced, successful executives at high-performing companies, their departures increased overall turnover rates in the top quartiles.
2. Market volatility is being treated as the “new normal”
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While boards in recent years have justified postponing succession plans to provide stability amid uncertainty, organizations can no longer delay leadership transitions hoping for a stable environment.
Many boards now recognize that the increasingly complex operating environment — marked by AI transformation, increased market uncertainty and regulatory changes — is the new normal, not just a passing phase of disruption.
Thus, transitions are being considered as a way to better prepare companies to deal with volatility and take advantage of rapidly transforming opportunities, rather than just trying to “wait it out”.
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3. Boards are seeking new CEOs externally more often
Recognizing this “new normal” has also led boards to reevaluate what leadership capabilities are needed to meet the demands of the role and whether those capabilities exist internally.
External hiring in the S&P 500 nearly doubled to 32.7% in 2025, reducing internal promotions to less than 70% for the first time in eight years.
How Boards Can Drive Better Transitions
Because succession planning can be a lever to support and drive strategy, boards can take the steps below to ensure their leadership transitions become more intentional and proactive.
1. Turn succession planning into an ongoing process
Ideally, succession planning should be integrated into risk oversight, strategy/talent reviews and annual assessments, rather than being treated as a one-off event.
To minimize reactive turnover and avoid disruptions, boards should create pre-defined plans for interim and emergency situations.
This means carrying out periodic readiness assessments of potential successors and linking possible scenarios to crisis management, corporate risks and transformation plans.
Boards should also ensure that committees are more involved throughout the process by formally incorporating succession principles into governance guidelines or bylaws and setting aside time in meetings to discuss the topic regularly.
2. Strengthen internal pipelines and maintain openness to external talent
Although external hiring is increasing, internal promotions still account for more than two-thirds of CEO appointments. Integrating the development of the next generation of leaders into long-term strategic reviews helps prepare internal candidates before transitions become urgent, and allows companies to build benches of successors capable of assuming roles regardless of how current volatility evolves.
For example, at a large consumer goods company, the compensation committee sets aside time on every quarterly agenda to review the development of the next generation of leaders. The committee discusses areas of development, career paths, and readiness metrics for high-potential executives, ensuring that the pipeline for future CEO and C-suite roles is cultivated actively, not reactively.
And as part of its holistic, ongoing CEO succession plan, a large-cap multinational organization conducts an annual mapping of external “ready now” and “ready soon” CEO talent and projections of CEO transitions in the industry.
This provides an up-to-date view of the external talent market, as well as organizations that may be looking to recruit senior leadership for their own CEO roles.
Whether the intention is to promote from within or hire externally, strategic boards maintain awareness of the talent pool in the industry, as well as CEO and C-suite executive transitions in the broader market.
3. Reassess whether current CEO profiles address persistent volatility
To ensure future CEOs are prepared for tomorrow’s challenges—and not just historical metrics—boards may want to update CEO competency frameworks annually. This model must prioritize agility, stakeholder management and digital fluency above service time or traditional operational experience.
Some companies are adopting scenario-based assessments, while others are using analysis of future growth potential to understand candidates’ ability to lead through disruption, rather than focusing solely on historical metrics.
The challenge: incorporate consistency, anticipation and clear communication
In periods of volatility, changes in CEO leadership can signal both responsibility and renewal. That said, there may still be cases where the initial perception of a CEO departure is interpreted as a sign of “failure.”
To avoid misinterpretations and reinforce stakeholder trust, boards must frame transitions as an essential part of a long-term strategic plan and an intelligent adaptation to uncertainty.
This may include transition communications accompanied by clear messages about continuity of governance and oversight, as well as linking CEO compensation to transition incentives and evolving strategic goals.
In an era defined by disruption, many proactive and strategic organizations have reframed the goals of CEO succession—from a reactive fix to a strategic refresh.
The next step is to institutionalize consistency. Making succession planning continuous positions boards to promote long-term value creation and shareholder confidence for generations.
c.2025 Harvard Business Review. Distribuído pela New York Times Licensing
