Corporate Governance | (ESG 360) | Succession: The impact of changes to long-term leadership

Research evidence excerpt

Corporate Governance | (ESG 360) | Succession: The impact of changes to long-term leadership

Corporate Governance

Succession: Impact on firm value and governance

Corporate leadership transition is a widely explored topic in both academic and market

research. In this report, we provide a new angle by isolating companies with long term-

leaders and assessing these companies' dependence on these individuals, as well as

the potential impact of a leadership change. In this section, we share key findings from

the relevant literature and assess our universe to identify these companies.

Leadership tenure: what does the evidence say?

We have previously explored succession-related themes. Most recently, our 2025 report,

CEO change–price impact, explored how share prices react to CEO change announcements,

offering valuable insights into several aspects, including the differing returns of companies

with internal versus external successors and the impact of remuneration on succession.

However, that analysis was a retrospective exercise covering companies across our universe

and, while there was an element of tenure differentiation, it did not address the most

extreme tenure levels. This report is forward-looking, focusing exclusively on long-serving

CEOs and Chairs whose departure has not been communicated.

We also expand our scope to encapsulate company Chairs, not only CEOs. Company Chairs

occupy a unique role because their relevance to investor perception, strategy design, and

decision-making can vary significantly depending on the firm and the individual. As such,

we included Chairs in our long-term leaders universe to ensure all bases are covered and

then assessed their relevance to this exercise in collaboration with our analysts.

Leadership length and company performance