External CEO Hires Nearly Doubled in One Year. Why Do Boards Almost Always Start the Search Too Late?
- Philip Lamb
- 2 days ago
- 5 min read
168 new S&P 1500 CEOs were named in 2025 -- the most since 2010. CEO turnover globally hit an eight-year high, with 234 departures across major companies, a 16 percent increase year-over-year and 21 percent above the eight-year average, according to the Russell Reynolds Global CEO Turnover Index. The succession rate reached 12.5 percent, up from 9.8 percent the prior year.
The number that matters most is this one: the share of S&P 500 CEO successions filled by external hires nearly doubled in a single year, jumping from 18 percent to 33 percent. In practical terms, boards that previously defaulted to internal succession are now reaching outside at nearly twice the rate they were twelve months ago.
That is a structural shift, not a statistical blip. And it is creating a surge in retained CEO search demand at the same moment that most boards are less prepared to run those searches than they have been in years.
Why Did External CEO Hires Nearly Double in a Single Year?
External CEO hires nearly doubled in a single year because internal succession pipelines have not kept pace with the complexity of the roles they are supposed to fill, and boards have started to acknowledge that gap in ways they were previously unwilling to. The executives who were built for the last operating environment are not always the right people for the next one, and boards that understand this are reaching outside earlier and more aggressively than their predecessors did.
The conditions driving the acceleration are specific. Post-pandemic organizational restructuring thinned the internal leadership bench at many companies faster than talent development programs could rebuild it. The AI transformation now underway requires a different set of leadership instincts than the scale-and-optimize model that shaped the prior decade of C-suite development. And the geopolitical and regulatory environment -- which now includes tariff volatility, energy transition mandates, and supply chain reconfiguration -- has created operating conditions that many internal successors have simply never managed.
Spencer Stuart reported that 60 percent of 2025 CEO successions were internal. That means 40 percent were external -- and in the S&P 500 specifically, that external share jumped to 33 percent. The gap between large-cap and mid-market is significant. Mid-market companies, which form the core of retained search work across Western Pennsylvania and the Appalachian region, often have even thinner internal succession pipelines than their large-cap counterparts and face the same complexity without the same bench depth.
Why Do Boards Almost Always Wait Too Long to Start a CEO Search?
Boards wait too long to start a CEO search because initiating the search feels like a signal that the current CEO's tenure is ending, and most boards do not want to send that signal until the decision is already made. The result is that the decision and the search happen simultaneously, which is the single most reliable predictor of a rushed, compromised outcome.
The mechanics of how this plays out are consistent across industries. A board begins to have private concerns about the current CEO's performance, fit for the next phase, or health. Those conversations are informal, cautious, and slow-moving. By the time the board reaches consensus that a change is needed, the decision is already months overdue. Then the board faces two equally uncomfortable options: announce the departure and run the search publicly, which signals instability to employees, clients, and shareholders; or run the search confidentially, which takes longer and limits the candidate pool.
Either path requires more time than the board has left itself. A properly run CEO search takes twelve to sixteen weeks from kickoff to accepted offer when managed with discipline. The searches that run under board time pressure -- when a departure has already been announced or a crisis has forced the issue -- produce worse candidate slates, shorter evaluation periods, and significantly higher rates of early departure by the incoming executive.
Napoleon understood the cost of compressed decision cycles: "Take time to deliberate, but when the time for action has come, stop thinking and go in." The deliberation phase in CEO succession is where boards do their worst work. They deliberate too long on whether to act, then try to compress the action phase to recover the time they lost.
What Does a CEO Search Look Like When It Runs Under Crisis Conditions?
A CEO search that runs under crisis conditions looks like a search optimized for speed rather than fit, and the outcomes reflect that optimization in ways that are expensive and entirely predictable. Boards and companies that have experienced a crisis-driven CEO search almost universally describe the same pattern: the finalist they selected was the best candidate available given the timeline, not the best candidate available in the market.
Those two statements are not the same. The best candidate available given a sixty-day timeline is whoever can move immediately -- the recently departed executive, the board director who agrees to step in as interim, or the finalist who impressed in compressed interviews. The best candidate available in the market is the person currently succeeding in a comparable role at a comparable company who was not considering a move until the right conversation reached them.
A retained search firm with real relationships in the sector can reach the second candidate. Under a crisis timeline, there is not enough time to do that work properly. A process that should take sixteen weeks runs in eight, and every compressed week reduces the quality of the candidate evaluation and increases the probability of a mismatch that surfaces inside the first eighteen months.
For more on what the CEO search process looks like when it is given the time it requires, read what retained executive search actually looks like and why it is not what most companies think and how long executive search actually takes. For family-owned businesses navigating this same timing challenge specifically, read why hiring an outside CEO is the hardest search a family business will ever run.
How Should a Board Prepare for a CEO Transition Before It Becomes Urgent?
A board that wants to avoid the crisis-search pattern should begin the succession conversation two to three years before it expects to need a result, and structure that conversation as an ongoing process rather than a single planning exercise conducted once and filed away. The organizations that handle CEO transitions smoothly are almost always the ones that were already having the conversation before the timeline became urgent.
PRL International is a retained executive search firm serving Pittsburgh and Western Pennsylvania, specializing in senior-level placements in manufacturing, energy, and mid-market companies where leadership transitions determine competitive outcomes for years.
In practical terms, advance preparation means three things. It means the board has clarity on the profile of the next CEO -- not a job description, but a genuine understanding of what operating environment the next leader will inherit and what capabilities that environment requires. It means the board has had an advisory conversation with a retained search firm about market conditions, candidate availability, and realistic timelines. And it means the board has internal alignment on decision authority, so that when the search begins, the process moves with the urgency the situation requires rather than stalling in committee.
For companies currently navigating leadership transitions at any level, read what a CEO search costs and why mid-market companies get it wrong and visit our mid-market executive search overview. For the confidentiality question most boards face at the start of this process, read how confidential executive search affects company morale.
If you are ready to fill a senior role or want to talk through your search, reach out at prlinternational.com/contact
Want to know what questions to ask before hiring a search firm? Download the free 7-Question Guide: https://prl-proposal.vercel.app/guide
Comments