Why “Safe” CEO Picks Can Be Risky
When markets are unpredictable, many boards delay leadership changes or opt for the most experienced candidate they can find. That feels safe—but it often locks the business into yesterday’s playbook.
Safe choices can dull urgency, confuse accountability when the outgoing CEO lingers in another role, and shorten tenures if the new leader isn’t set up for the next chapter of growth.
Three common pitfalls to avoid
- Waiting it out. Postponing succession sends a “hold position” message to the organisation when you actually need adaptation.
- Shadow leadership. Keeping the departing CEO in a powerful new seat can blur decision rights and undermine the successor.
- Over-valuing past experience. Deep experience can help—but it can also anchor leaders to what worked last time, not what’s needed next time.
What to value in a CEO today
Range beats depth. Boards should seek leaders who’ve navigated change, made mistakes, recovered, and built teams that can flex. Look for:
- Adaptability and learning speed over perfect industry pedigree.
- Executive intelligence: the ability to ask sharper questions, update assumptions quickly and bring people along.
- Followership: credibility and clarity that move stakeholders to act—employees, customers, investors and partners.
Turn succession into strategic advantage
1. Balance risk and reward—on purpose.
Clarify where your company is in its cycle. If reinvention is due, prioritise a transformative leader. If execution must compound recent gains, hire an operator who loves systems and scale. Some boards alternate intentionally: transformer → operator → transformer—by design, not by accident.
2. Keep succession “always on.”
Treat CEO-readiness as an ongoing program, not a one-off event. Rotate high-potentials through different functions, markets and stakeholder-facing roles to build range and resilience. Use simulations and crisis drills to test judgment under pressure. Ensure diverse thinking styles in the pipeline so you’re not forced into a single “safe” profile.
3. Reframe the criteria.
Shift from backward-looking checklists (“has been a CEO”, “20+ years in our sector”) to forward-looking capabilities: adaptability, curiosity, ambiguous-problem solving, change leadership and stakeholder trust. Probe achievements for how results were delivered, not just what was delivered.
Practical steps for Australian boards
- Define the next 3–5 years. Name the few strategic problems the CEO must solve.
- Set clear decision rights. If an executive chair is used, time-box it and document boundaries.
- Benchmark internally and externally. Test internal candidates against an external market scan.
- Plan the first 180 days. Pre-wire governance, communications and metrics so momentum starts on day one.
- Review director responsibilities. Ensure directors understand their obligations during transition, particularly around solvency, disclosures and stakeholder communications. (See our guide on resolving director disputes).
Need a pragmatic succession plan?
Book a consultation with The Quinn Group’s integrated team of accountants, lawyers and M&A advisors to tailor a plan to your business.
Call 1300 784 667 Enquire OnlineNEED HELP? This article provides general information and should not be considered legal or tax advice. For personalised guidance, please contact our expert team of tax accountants at The Quinn Group by calling 1300 QUINNS (1300 784 667) or +61 2 9223 9166, or submit an online enquiry form to arrange an appointment.
