Once the chair sits empty, the next CEO is almost untouchable
In September 2023 the president of the Canadian Institutes of Health Research | Instituts de recherche en santé du Canada (CIHR) retired. The seat sat operationally empty for fifteen months while the search played out. During that vacancy, employees took the federal employee survey. Their ratings of immediate supervisors held steady. Their ratings of senior leadership dropped almost eighteen points on a hundred-point scale. Same people, same teams, same work. The only thing that changed was who was at the top, and for fifteen months the answer was nobody permanent.
I submitted my first working paper to a conference this week. It looks at exactly that pattern across the federal public service, and I am excited to see where this leads (but also a bit apprehensive about the feedback). The paper asks whether board governance changes how employees rate senior leadership when an organization is under stress. Comparing thirteen federal organizations across four cycles of the employee survey, board-governed organizations held their senior leadership ratings four points higher than minister-direct departments after the pandemic, with no measurable gap before it.
So when Rob Langan of ESADE in Spain published a new paper in the Strategic Management Journal asking whether boards are reluctant to remove poorly performing successors to interim CEOs, I read it twice.
Langan studies a different setting, public companies in the S&P 1500, but he is asking a version of the same question I am. What happens to a governance system after a leadership gap? His finding lands hard. A CEO who follows an interim CEO is roughly 86 percent less likely than a CEO who follows a permanent CEO to be removed early when performance is poor. The board does not snap back to normal monitoring after the interim period ends. The interim period leaves a fingerprint on every succession decision the board makes for years afterward. He tests two reasons: directors protecting their reputations, and directors worrying that another succession will hurt the firm. The data point to the second. Boards are not being self-serving. They are scared of the next disruption.
Leadership gaps are not recoverable interludes. They are decisions with multi-year consequences.
This changes what succession planning is actually for. Most boards treat it as a checklist of potential names against current roles. That is the easy part. The harder part is that the absence of a ready successor forces an interim appointment, and the interim appointment then quietly weakens the board's ability to course-correct on the permanent successor for years. Succession planning is not just about being ready when the seat opens. It is about preserving the board's freedom to act later.
It also reframes how a post-interim CEO should be evaluated from outside the boardroom. The board's tolerance for poor performance in that seat is not a sign that the CEO is doing well. It is a sign that the board has run out of room to maneuver.
The mechanism question is where I am still working. Langan finds the effect is stronger when board ownership is higher, suggesting concern for the firm rather than concern for reputation. My own setting is different, since federal directors do not own equity, but the underlying instinct may be the same. Once a governance system has absorbed one disruption, it is willing to tolerate a lot to avoid the next one. That instinct may be protective in the short run and corrosive in the long run.
The paper is rigorous and the framing opens up a research program that goes well beyond interim CEOs. Worth your time if you sit anywhere near governance, succession, or organizational resilience.
For those of you working with boards directly, are you seeing this pattern in practice?
Read his paper here: https://sms.onlinelibrary.wiley.com/doi/10.1002/smj.70041