Most private-company boards know succession planning matters. Far fewer have a plan in place.
A June 2026 study by the Private Directors Association found that while 71% of fiduciary boards conducted CEO evaluations, only 45% had succession plans.
A separate Deloitte survey found that 78% of family-business executives anticipated a CEO transition within the next decade, yet only 23% were actively implementing a succession plan.
The message is clear: Many companies are evaluating today’s leadership without adequately preparing for tomorrow’s.
For private companies, where leadership changes can affect business continuity, family relationships, and long-term growth, waiting until a transition is imminent creates unnecessary risk.
Here are four questions every private-company board should consider.
1. Do we have a succession plan, or just an idea of who might be next?
Identifying a potential successor is not the same as having a succession plan.
An effective plan defines the qualifications required for future leadership, identifies potential candidates, and establishes a process for evaluating and selecting the right person.
It also clarifies who makes decisions and how the transition will be managed.
Without that structure, even companies with an obvious successor may face difficult decisions when the time comes.
2. Are we prepared for both planned and unexpected transitions?
Many boards plan for succession around an anticipated retirement or leadership change.
But transitions don’t always happen on schedule.
An unexpected departure, health issue, or change in business circumstances can leave a company facing critical decisions with little time to prepare.
Boards should consider both long-term succession and an emergency leadership plan. Having a process in place before you need it lets the organization respond with greater confidence and stability.
3. Are we planning for the company we’re becoming?
The person who successfully led a company through its last decade may not be the person best equipped to lead it through the next.
Growth, technology, changing markets, and evolving ownership structures can create new demands on leadership.
Succession planning provides an opportunity to look beyond replacing an individual and consider what the organization will need in the years ahead.
That means regularly revisiting leadership qualifications, evaluating internal talent and identifying gaps that may require outside expertise.
4. Are we looking beyond our existing network?
Private companies often have strong relationships with trusted advisors, industry peers and professional contacts. Those relationships can help identify potential successors.
But relying exclusively on familiar networks can limit the range of candidates considered.
A thoughtful succession process considers both internal and external talent, emphasizing the experience, leadership capabilities, and perspective that best align with the company’s future.
An independent search process can also bring objectivity to decisions that may involve longstanding relationships, family dynamics, or competing priorities.
Preparation is a Board Responsibility
Succession planning shouldn’t begin when a leader announces a departure. It should be an ongoing part of good governance.
Research shows many private-company boards still have work to do. The opportunity is to move from recognizing the importance of succession planning to putting a meaningful process in place.
Cardinal Board Services works with private, family-owned, ESOP, and middle-market companies to identify and recruit executives and board members who align with their business goals, culture, and long-term strategy. With direct partner involvement throughout the search process, Cardinal helps companies look beyond familiar networks, evaluate qualified candidates, and make informed leadership decisions.
Whether a transition is expected or unexpected, the right people and a thoughtful process can make all the difference.
Sources
- Private Directors Association, June 2026 private-company governance research. Survey of 151 respondents representing 142 companies.
- Deloitte, February 2026 family-business succession survey. Survey of 300 family-business executives.