Getting succession planning right can be difficult, as seen in the examples of Diageo and GSK.
One company ousted its CEO after a two-year tenure and a 43% decline in share price, replacing them with an interim CEO, the CFO, to avoid a leadership vacuum. The board chair stated they are focused on
"securing the best candidate… to take the company forward".
In contrast, another company announced the COO's transition to the top job three months in advance, with the current CEO staying on until September 2026 to ensure a smooth transition, resulting in a 3.6% rise in shares.
These two firms offer different pictures of succession planning, highlighting the challenges of getting it right.
Author's summary: Succession planning is a challenging task.