In corporate leadership, longevity can be both a strength and a vulnerability. South Africa’s listed companies on the JSE have been shaped by some of the most visionary and resilient CEOs in the world — leaders who have steered their organisations through economic headwinds, social transformation and global crises. Yet, as we look to the future, it’s worth asking: are we doing enough to prepare for what comes next?
Succession planning is not just a governance box to tick; it’s a strategic imperative. And perhaps it’s time to consider a more structured approach to CEO tenure, one that encourages renewal, reflection and reinvention. Having worked closely with boards and executives across the continent, I’ve seen how leadership structures shape organisational success.
One idea worth considering is whether CEOs should serve on five-year contracts, with a reapplication or board evaluation before continuing into a second term. This isn’t about undermining leadership — it’s about exploring ways to keep it dynamic, accountable and future-fit. It could be a powerful approach in ensuring leadership remains aligned with the evolving needs of the business.
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This argument is not just philosophical. It’s backed by extensive research, including insights from the bookLifecycle of a CEO, co-authored by Bob Stark and Claudius Hildebrand. Their analysis of more than 2,000 CEOs in the S&P 500 reveals a predictable performance curve across a CEO’s tenure.
The first year is often buoyed by a “honeymoon” period, where markets price in optimism and change. The second year tends to be a slump — what they call the “calibration stage”. Years three to five are typically the most productive, marked by reinvention and alignment between strategy and execution.
But here’s the kicker: two thirds of CEOs who serve 10 years or more perform worse in their second five years than in their first five. This isn’t due to catastrophic failure — it’s a slow degradation, a creeping complacency that sets in over time and that boards often fail to address. South Africa is fortunate to have a cadre of CEOs whose leadership has left an indelible mark on the corporate landscape.
Many have demonstrated remarkable resilience, strategic foresight and deep commitment to the organisations they serve. Their continued presence in leadership roles reflects their value and the trust placed in them by boards and shareholders alike. At the same time, their long tenures raise an important conversation — not about questioning capability, but about continuity and preparedness.
For instance, in one listed company the CEO has held the position for 34 years, while the chair has served for 31 years. There are several others with similarly extended tenures, and we’ve even seen CEOs return from retirement to lead again. These leaders’ institutional knowledge is invaluable, but what happens if they were to step down unexpectedly?
This is not a critique; it’s a call for proactive planning. It should be a deliberate, strategic journey that begins years in advance. One of our clients has already initiated a CEO succession process even though the current CEO is only due to retire in five years’ time.
That kind of foresight is commendable and necessary. In South Africa, succession planning is often complicated by the depth of respect for long-serving leaders and the relatively small talent pool available for top executive roles. But that makes it all the more important to start early, develop internal candidates, and create leadership pipelines that reflect the future needs of the business.
This approach mirrors international best practices. In Germany, fixed-duration CEO contracts are common, and they naturally prompt boards to reassess leadership. While we don’t yet have conclusive data on whether this avoids the complacency trap, it’s a model worth exploring in the South African context.
Succession planning has evolved. In the past, CEOs would simply present their chosen successor to the board. Then came the “three-candidate” model, where the board chose from a shortlist presented to them by the outgoing CEO. Today the most effective boards start succession planning years in advance, developing a pipeline of potential leaders from within and outside the organisation and evaluating them against future business scenarios.
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