The CEO Succession: A Window on How Boards Can Get It Right When Choosing a New Chief Executive book by Dennis C Carey is concludes that 10 key practices are required: Have a strong speaker board; continually expose the management team to counsel and encourage the next generation of CEO prospects for the first experiences with advice from outside, media and financial community and to create an asset or exploitation Executive Committee for more exposure to executives an overview of the company, its strategy and issues and to make succession planning an ongoing, time real take as much human drama on the process as possible (it is particularly difficult on the number twos); link some of CEOs compensation to succession planning and progress; directors are paid in stock and additional investments in shares of the company; benchmark internal candidates from the outside and develop a culture that encourages succession (to Built to Last).
So much for the summary. Below are the problems. Although this book aims to be a best practice book, it does not investigate the businesses succeed. It is actually a limited survey of practices, with the collection of some who seem to function better. To be precise, such an investigation should have examined in detail equivalent to less than 400 companies. A handful will not cut.