It may be the most important role in the company but firms are failing to identify or train successors to the chief executive, according to a survey.
Of 103 public and private equity-owned company executives responsible for CEO succession planning, almost a third said they have not formally identified a successor to take over the top job, while 31 percent have provided no formal training to potential successors.
Despite the lack of training, the survey, by global advisory firm AlixPartners and private equity recruitment specialist Vardis, found that 48 percent of European respondents expected an incoming chief executive to be ready to take on the role within six months. At least European bosses have some time to prepare; 29 percent of US respondents thought the new CEO should be ready immediately.
Private equity companies placed far more importance on chief executives having experience of a specific challenge and were far more likely to pick an external CEO (83 percent), compared with public company respondents (51 percent).
They are not likely to hang around for long, however. Some 71 percent of respondents revealed that the CEO is replaced within two years once a firm has been bought out by private equity.