CEO succession is usually discussed as a planning exercise. Boards identify potential successors, develop internal talent, periodically review the succession plan, and prepare for the orderly transition that eventually comes with retirement or another planned departure.
But succession does not always wait for the planning calendar. In an article in the Harvard Law School forum on Corporate Governance, titled Forced CEO Departures, the authors reported on a new study by The Conference Board, developed with ESGAUGE and other collaborators, that examined forced CEO departures among Russell 3000 and S&P 500 companies from 2024 through August 2026. Roughly one in seven CEO succession cases were classified as forced in both 2024 and 2025. In the Russell 3000, 49 forced departures occurred in 2024 and 55 in 2025. The S&P 500 recorded seven and 10, respectively. The forced departure numbers are interesting. The governance implications are more important.
This research on forced CEO departures reminds boards to prepare for unscheduled CEO transitions. For Chief Compliance Officers, the findings raise an equally important question: what information should the compliance function be providing to the board before a leadership problem becomes a leadership crisis?
Forced CEO departures demonstrate that succession planning, executive accountability, corporate performance, investor confidence, culture, and risk oversight cannot be separated into different governance boxes. They ultimately meet in the boardroom. For a Chief Compliance Officer (CCO), they also demonstrate why compliance must function as an organizational sensor capable of identifying patterns that individual incidents may not reveal.
Forced Succession Is a Governance Risk
The report defines a forced departure broadly enough to capture the realities of corporate governance. A departure is forced when evidence indicates that the board, activist investors, an investigation, performance concerns, misconduct, or strategic disagreement materially influenced the timing or terms of the CEO’s exit. Importantly, a departure publicly described as a resignation or retirement may still have been board-driven. That distinction matters.
Boards should not think about CEO succession solely as identifying the person who eventually replaces a successful CEO. Succession planning must also contemplate what happens when the board concludes that the current CEO can no longer lead the organization effectively.
The report’s 2024 and 2025 data make that point. Forced departures represented 14.7 percent and 14.8 percent of Russell 3000 succession cases, respectively. Among the S&P 500, the corresponding figures were 14.3 percent and 15.2 percent. Those figures should change the boardroom conversation.
The question is not simply, “Who succeeds the CEO someday?” It is also, “What happens if we need a new CEO next Monday?”
Performance Is Becoming a Governance Question
Perhaps the most significant finding concerns why CEOs were forced out. Underperformance accounted for 37 percent of Russell 3000 forced departures across the period studied. It increased from 31 percent in 2024 to 44 percent in 2025 and remained the largest category through August 2026. Underperformance, activist pressure, and termination without cause collectively accounted for 70 percent of forced departures during the full period.
For directors, that creates a difficult governance question. When does poor performance become a leadership problem? A single disappointing quarter should not automatically become a referendum on the CEO. External economic conditions, industry disruption, commodity prices, interest rates, geopolitical events, and other factors can affect performance.
Yet boards cannot allow those explanations to become permanent excuses. The report recommends establishing in advance the conditions that trigger a deeper assessment of CEO effectiveness. That assessment should extend beyond financial results to strategic milestones, competitive position, organizational capability, and how the CEO responds to setbacks. That is an important governance discipline. Agreeing on the indicators before the crisis reduces the danger of redefining success after performance deteriorates.
The CCO Has a Different Window Into CEO Effectiveness
Here the compliance function enters the discussion. The report is primarily about CEO succession and board governance. It does not assign the CCO responsibility for evaluating CEO performance. Nor should it. But compliance often sees organizational information through a different lens than Finance, Strategy, HR, or Investor Relations.
A CCO may see whether employees are becoming reluctant to speak up. Compliance may identify retaliation concerns involving senior management. Investigations may reveal recurring management override. Hotline data may show patterns concentrated around particular executives or business units. Third-party reviews may expose pressure to circumvent controls. Internal investigations may demonstrate that employees believe commercial performance is valued more highly than ethical conduct.
One event may mean little. Patterns can mean much more. This is why an effective CCO should not simply report hotline statistics to the board. The CCO should help directors understand what the information may be saying about organizational culture, controls, accountability, and risk.
The question becomes: What does the board need to know to discharge its oversight responsibilities?
That is a very different question from: What compliance information did management ask us to provide?
CEO Accountability and the Control Environment
CCOs should also pay attention to forced CEO departures. The CEO sits at the top of the organization’s control environment. The CEO’s conduct affects incentives, resources, accountability, escalation, management behavior, and whether employees believe controls are genuine requirements or obstacles to business performance.
That means directors assessing leadership should consider more than revenue growth and shareholder returns. They should understand whether management responds appropriately when controls identify problems. Some key questions a CCO might ask include:
Does the CEO support investigations even when they involve high-performing executives? Does management remediate identified weaknesses? Are compliance personnel adequately resourced and empowered? Are executives held accountable consistently? Does information reach the board without being filtered into insignificance?
These questions connect CEO oversight to compliance program effectiveness. They also reinforce why direct access between the CCO and the board or an appropriate board committee matters. The value of that relationship becomes clearest when the information the board needs is information senior management would prefer not to discuss.
Activists May Ask the Questions Boards Should Already Be Asking
The report contains another significant finding.
Among S&P 500 forced departures, activist pressure accounted for five of 10 departures in 2025. Across 2024 through August 2026, activists were associated with eight of 19 forced departures, or 42 percent. The report notes that activist campaigns frequently focus on matters already within the board’s remit, including performance, strategy, capital allocation, portfolio structure, governance, and confidence in management. Forced CEO Departures
There is a governance lesson here. A board should not need an activist investor to tell it which difficult questions to ask. Directors should periodically examine the company through an independent investor lens. Where is performance lagging? Which strategic assumptions have not proved correct? Where has capital allocation failed to produce expected results? What would a sophisticated outsider identify as the company’s vulnerabilities?
For the CCO, there is a parallel exercise. What would a regulator, whistleblower, investigative journalist, plaintiff’s lawyer, or enforcement authority see if they examined the same facts? These perspectives are not substitutes for the board’s business judgment. They are tools for challenging assumptions. Effective oversight requires directors to seek disconfirming information, not just information that supports management’s existing narrative.
Succession Planning Needs a Break-Glass Option
The report recommends that boards maintain an accelerated succession plan alongside traditional succession planning. That distinction is critical. A normal succession plan asks who might become CEO in several years. An accelerated plan asks who takes control tomorrow morning.
The board should know who can provide immediate continuity, which internal executives could become permanent successors, when an external search would be required, and how to retain key executives during the transition. The plan should also address interim authority, compensation, severance arrangements, and employee and investor communications. Compliance should be part of that contingency architecture.
Questions might include: If the departure involves misconduct or an investigation, who controls the investigation after the CEO leaves? Who has authority over document preservation? Who makes disclosure decisions? Who communicates with regulators? What happens if other senior executives are implicated? Does the CCO continue reporting through the same management structure, or should reporting temporarily move directly to the board?
The report itself does not address these questions, but they follow directly from the compliance risks created by an unexpected leadership transition. The worst time to design these protocols is during the crisis.
The Board and CCO Need an Early-Warning System
The larger lesson from the forced-departure data is not that boards should terminate CEOs more quickly. It is that boards should become better prepared to recognize and respond to deteriorating conditions.
The report found no consistent company-size profile for forced turnover. Elevated rates appeared across the revenue spectrum. The more meaningful indicators were company-specific factors, including persistent underperformance, strategic misalignment, and investor scrutiny. Forced CEO Departures
That suggests boards need an integrated early-warning system.
- Financial performance is one signal.
- Strategic execution is another.
- Investor sentiment is another.
- Compliance and culture data should be another.
The CCO can contribute by identifying trends in allegations, investigations, retaliation, control overrides, disciplinary decisions, third-party exceptions, and other indicators that may reveal stress inside the organization. The board then has the responsibility to connect the dots.
Questions for the Board and CCO
Boards should periodically ask whether they have defined the conditions that would trigger a reassessment of CEO effectiveness; whether they have a genuine emergency succession plan rather than simply a long-term succession plan; whether directors receive information about culture, investigations, controls, and retaliation without inappropriate management filtering; and whether they understand recurring concerns raised by shareholders, employees, auditors, compliance, and other stakeholders.
CCOs should ask different questions. Are we giving the board data or insight? Are recurring issues being presented as isolated events? Are senior executives subject to the same accountability standards as everyone else? Does the CCO have a practical route to the board when senior management itself presents the risk? If the CEO suddenly departed tomorrow because of an investigation, could Compliance continue operating without interruption?
Those can be uncomfortable questions. Yet, they are also precisely the questions effective governance requires. Forced CEO departures are not simply stories about executives losing their jobs. They stress-test the governance system around those executives.
The board’s responsibility is to ensure it can recognize when leadership circumstances have materially changed and act deliberately, not reactively. The CCO’s responsibility is different but complementary: ensure that compliance, culture, control, and investigation information that can inform that judgment reaches the board clearly and promptly.
A board should never discover during a CEO crisis that the warning signs were there all along. A better governance model identifies those signals early, understands what they mean, maintains credible succession alternatives, and establishes decision processes before they are needed. That is not planning for failure. It is planning for effective oversight.
