Earlier this year, when Warren Buffett formally announced his retirement from Berkshire Hathaway, effective at the end of 2025, the headlines celebrated the close of one of the most iconic CEO tenures in American business history. But the more instructive story is not in Buffett's generation-defining departure, but in the meticulous and deeply strategic process that led to it.
At Berkshire Hathaway's 2021 annual shareholders' meeting, Buffett noted that "the most significant risk factor a company faces is selecting the wrong CEO." That philosophy underpinned Berkshire Hathaway's quiet, deliberate, and low-friction succession process, carried out without theatrics or an over-engineered executive retention scheme.
Greg Abel, Mr. Buffett's eventual successor, had long been positioned for the role in plain sight, having first become an executive at Berkshire Hathaway as part of an acquisition all the way back in 1999. This long-term strategising exemplifies operational discipline on Buffett's part, along with alignment with the firm's values. The absence of last-minute manoeuvres wasn't just good governance, it was a strategic asset that reinforced market confidence, continuity, and clarity.
By spending years or even decades considering his successor, Warren Buffett reminds us that CEO succession is not a project to be triggered by crisis or shareholder pressure. It is an enterprise-wide responsibility to be embedded into the culture and cadence of leadership itself.
Rhetoric vs Action
Our latest Route to the Top global research report reveals that while many boards agree in principle with Buffett's philosophy, few act on it. In fact, only 26% of CEOs and board members across 27 markets said that CEO succession is among their top priorities and treated as such. One-third admitted that, though it is labelled a priority, it is often overlooked. Most strikingly, 40% said CEO succession planning simply wasn't a priority at all.
This gap is not just theoretical. Leaders who treat succession as a continuing discipline report better outcomes, both in leadership confidence and in financial performance.
Three Mindsets, Three Outcomes
The research revealed that boards can take on one of three mindsets:
- Continuous Succession Strategists (25%): Treat succession as a strategic priority with integrated planning and pipeline evaluation.
- As-Needed Succession Traditionalists (just over 50%): React only when there is an imminent need, focusing on a few top leaders.
- Reactive Succession Thinkers (21%): Engage only during emergencies, with little to no advance planning.
Across individual regions, the differences are stark. For example, only 12% of boards in APAC (Singapore, Hong Kong, etc.) fall into the proactive strategist category, compared to 39% in Australia and New Zealand. In family-owned businesses, 60% follow a continuous approach, compared to just 6% of venture-backed firms.
Why Mindset Matters
The distinction between these mindsets becomes even clearer when examining how leadership is treated in broader enterprise performance. Continuous succession strategists are far more likely to seek the same rigour in their leadership pipeline data as they do in financial or cybersecurity metrics. They integrate leadership planning into their business strategy, identify successors for critical roles, and prioritise leadership development and retention at all levels.
In contrast, reactive thinkers conduct minimal planning, only addressing leadership when forced to do so, often under unfavourable conditions - in other words, when a CEO departs their role unexpectedly, or is dismissed by the board.
The payoff for strategic succession planning is tangible. Among continuous succession strategists:
- 78% are confident their executive pipeline strategy positions the organisation well for the future, versus just 20% of reactive boards
- 70% are confident in their CEO succession planning, versus 28% of "as needed" and only 13% of "reactive" boards
The most compelling finding of the research is the link between confidence in leadership planning and financial performance: 76% of leaders confident in both CEO succession and executive pipeline planning said their companies outperform peers financially, compared to just 48% of those confident in only one, and a mere 33% among those confident in neither.
Pressure from Stakeholders and Regulation
Boards are increasingly aware that their succession practices may soon face external scrutiny. Two-thirds of respondents expect stakeholders to demand more transparency, for succession practices to influence company valuation, and for regulatory oversight to increase.
Despite this, among boards lacking confidence in their current processes, one common recommendation stood out: make planning more continuous. Others advocated for tighter integration with strategic planning, delegating the process to a dedicated committee, and involving the full board or key executives like CHROs in the process.
Bridging the CEO-Board Gap
Directors and CEOs don't always agree on what needs to change. Directors tend to prioritise increasing the board's involvement and linking succession more closely with strategy, while CEOs favour involving other executives more and enhancing internal transparency. Every board's context is unique, but both camps agree that today's episodic model must evolve into a sustained, strategic discipline.
To achieve this, boards should begin with a critical self-assessment: Are our CEO succession practices truly positioning us for long-term success? If that is not the case, I recommend four key shifts:
- Always Be Planning: Evolve succession from a one-time project to a constant process.
- Integrate with Strategy: Align succession planning with business goals and risks.
- Simplify: A disciplined approach need not be time-consuming or expensive.
- Link to Value: Treat succession as a lever for performance, not a checkbox.
Warren Buffett's final act offers a model worth emulating. In his hands, succession was never theatre. It was stewardship: disciplined, deliberate, and deeply strategic. More boards should follow his lead.
