The boardroom discussion that never happened often costs the most. While organisations pour resources into strategic planning, market analysis and digital transformation, executive agendas often carry a glaring and potentially damaging omission: when to leave.
Timing a strategic exit benefits the individual – avoiding ennui, stagnation, complacency, unexpected and unplanned-for end of tenure – and protects legacy. It is also essential for the health of the organisation.
Analysis by Harvard Business Review found that poorly managed CEO and C-suite transitions may be responsible for loss of up to $1 trillion annually in market value across the S&P 1500 alone.
Executives who have engaged in leadership development and reflection are increasingly recognising this reality and asking their Rialto coaches for guided support to prepare exit strategies and onward plans up to three years in advance.
Executive careers follow distinct phases, each demanding different approaches to succession planning. Between ages 45-59, just as career earnings and status typically peak, leaders face additional responsibilities: parenting, caring for aging parents, and planning for their own health and wellbeing. This midlife phase represents the critical window when proactive succession planning delivers maximum benefit. However, senior leadership of all ages and at all levels can benefit from this type of detailed strategic career development.
Academic research (from Boston University, the University of Cologne, the University of St. Gallen, and the Karlsruhe Institute of Technology) examined S&P 1500 companies over 25 years and identified a pattern: company value typically peaks around a CEO’s tenth year in post. After approximately 14 years, firm value begins to decline – first gradually, then precipitously – for as long as the CEO remains.
CEO turnover reached a record level in 2025, rising 16% in a single year and continuing an upward trend as a result of geopolitical and economic volatility which is creating unprecedented pressures for senior leadership to deliver results in a complex and challenging market. Russell Reynolds Associates’ research found that 38 FTSE 350 chief executives stepped down in 2022, more than double the 18 exits of the previous year. In the S&P 500, CEO successions rose from about 7% in 2024 to 12% in 2025, even in top-performing quartiles. The average tenure for outgoing CEOs fell to about 6.8 years from around 7.7 in 2024.
In other c-suite positions:
Communication and innovation-driven sectors saw the highest turnover, while financial services and communications saw lower turnover.
At this crossroads, many leaders find themselves asking: What is truly important to me now? What might a future next phase look like? How do I want to be remembered? Do I want to continue working at this pace, or would a new balance bring more fulfilment?
These questions demand structured reflection. Successful succession planning requires taking stock of what matters most, evaluating past roles, career highlights and determining key areas of impact and enjoyment. Values and priorities shift: is it mentorship, family, innovation or social impact that now drives decisions?
Executives who plan succession 2-3 years ahead give themselves the best chance of securing markedly better outcomes than those caught in reactive transitions. This extended timeframe creates space to explore alternatives systematically.
A portfolio career offers one compelling path. Instead of full-time leadership, many senior executives shift to a portfolio of advisory roles, non-executive director positions and/or board memberships. This approach allows individuals to remain engaged while enjoying more flexibility and variety. For others, entrepreneurship beckons, turning expertise into new business ventures or advisory practices.
This is where network activation proves essential. Leveraging and building networks to explore new avenues aligned with passions and expertise can be achieved while continuing in role, creating transition options before they become necessity.
Savvy executives monitor organisational and market indicators 12-24 months before restructure announcements become public knowledge. Board composition changes warrant particular attention. New CFO appointments, strategic review announcements or activist investor involvement frequently precede senior-level restructures.
Research published in the Journal of Finance found that CEO succession planning disclosure significantly mitigates negative market reactions when outperforming CEOs depart. Conversely, executives whose organisations underperform sector benchmarks face compressed timelines regardless of individual capability.
Analysis showed that up to 50% of business exits stem from unexpected approaches from buyers, making reactive planning increasingly costly.
Excessive tenure can damage outcomes as severely as premature departure. The optimal CEO tenure ranges from 7-15 years.
Long-tenured executives freeze career paths for rising talent while success and stability can breed complacency. Fortune magazine analysis found that CEOs in years six to ten often fall into the “complacency trap,” playing defence rather than offence, building strategy and capital allocation based on existing core competencies, focusing on what has succeeded in the past instead of laying down the foundations for what is approaching on the horizon.
The damage extends beyond organisational performance. Executives who overstay often struggle to secure comparable positions elsewhere. The market might interpret extended tenure as either lack of ambition or inability to secure alternative opportunities.
Legacy planning requires intentional action. This involves mentorship and knowledge sharing, passing wisdom to the next generation of leaders. It requires ensuring current roles transition smoothly by empowering successors and leaving behind clear vision.
For some, legacy involves exploring internal leadership opportunities – transitioning into strategic roles such as board positions or practice leadership whilst continuing to shape the organisation’s future. For others, it means contribution to causes through philanthropy or social impact initiatives.
Effective transition readiness operates on multiple parallel tracks. Succession narrative development requires particular sophistication. The distinction between “I’m pursuing new challenges” and “my role was eliminated” determines future opportunities. Demonstrable exit planning enables individuals to retain control and value, as well as creating a mindset of continuous career development, planting visible markers of that dynamic trajectory.
UK corporate governance codes explicitly call for “plans in place for orderly succession to both the board and senior management positions.” Executives who visibly champion succession planning display their strategic credentials while building transition optionality.
Strategic transition planning operates on a 24-month horizon. Months 1-6 involve honest evaluation of organisational trajectory, personal market value and alternative opportunities. This requires engaging discrete advisory support to assess options without triggering organisational concern.
Months 7-12 focus on network activation and credential building: securing board positions, advisory roles or strategic appointments that establish credentials independent of current role.
Months 13-18 require active cultivation of internal successors while developing the transition narrative. This determines whether the move reads as strategic evolution or forced departure.
Months 19-24 involve formal succession announcements, handover planning and launch of next-phase positioning. Done well, this period cements legacy while launching the executive’s next chapter from strength.
Poor succession planning costs organisations an average of $1.8 billion in shareholder value according to research on the world’s largest 2,500 public companies. Korn Ferry found that nearly a third of newly appointed CEOs departed by their third year, with 11% leaving after just one year. This “three-year itch” represents devastating personal financial and reputational cost as well as an organisational one.
ASAE research analysing 28,000 tax forms found that CEO severance packages averaged just 10 months of base pay, with a median of 8.2 months. Executives terminated without preparation lose unvested equity compensation, often the most valuable component of their package.
Executives who position early can negotiate enhanced severance packages (C-level packages often reach 1-2x base salary, CEOs up to 3x) as well as valuable outplacement support, benefits worth hundreds of thousands to millions that evaporate in reactive scenarios.
Meanwhile, those who exit reactively often face prolonged periods securing comparable roles, with market perception of forced departure diminishing negotiating leverage in subsequent positions.
Conversely, executives who plan transitions 2-3 years ahead can achieve dramatically superior outcomes. Executives who build board credentials this far ahead can command premium NED fees, for example, while those forced to seek board positions reactively often begin with unpaid pro bono roles to establish track record.
The executives who secure the best outcomes share a common characteristic: they begin planning transitions long before circumstances force decisions. They recognise that succession planning demonstrates strategic thinking, not admission of weakness.
For those willing to have the conversation now, while performing strongly, the future offers opportunities that crisis transitions can never deliver.
Rialto partners with executives to protect what they have built and navigate their next critical phase of transition. Our specialised programmes help leaders map priorities, explore opportunities both within and beyond their current organisation and communicate next steps strategically to secure desired futures. With deep expertise in market intelligence and UK/European executive markets, Rialto delivers boutique, discrete, highly personalised support during critical transitions.
Contact Rialto on +44 (0) 20 3746 2960 to discuss your executive transition strategy.
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