As we ramp up for The Private Company Governance Summit 2026, which will take place June 10-12 in Washington, D.C., we are speaking to our panelists to get a bit of insight on the topics they will be discussing at the event. Today, we speak with Tony Brausen, director of Adolfson & Peterson Construction, about the subject matter of “Preparing for the Next CEO: What Every Board Should Know,” the session he will be participating in at PCGS 2026.
Private Company Director: What would you say the board’s role is in spotting and developing possible CEO level talent both within and outside the organization?
Brausen: One of (if not) the most important and consequential roles of a board is to hire, evaluate, develop and (when necessary) replace the CEO. There is no one to whom these responsibilities can be delegated. You can’t ask consultants or human resources to do it, although the chief human resources officer (CHRO) should be a good partner for the board in the succession planning process, particularly on the development side of it.
CEO succession is not a one-time event. It’s a continuous responsibility that has no end date. Similar to politicians who, the day after winning an election, begin the process of running for reelection, the day after you appoint a new CEO, the CEO succession planning process starts again.
Some boards may take the view that, if we lose the CEO, we will simply conduct a search and hire an external CEO. I would suggest that the succession planning process should incorporate the prospect of an external hire (in part, to ensure you have the absolute best CEO, all things considered), but a significant amount of emphasis should be placed on internal development of the CEO successor. Why? The risks associated with the promotion of a well-qualified and well-developed internal candidate are substantially less than the risks associated with bringing in an outsider as the next CEO. At the same time, high-performing boards maintain an active view of the external market, not because they expect to hire from it, but to benchmark and avoid complacency.
With an internal promotion to CEO, you will have significantly greater visibility into exactly what you’re getting, including the strengths, missing competencies and weaknesses. And if the succession planning process has been conducted in a thorough and thoughtful way, it will leverage the individual’s strengths to enhance them and it will appropriately develop the areas considered missing or weaknesses before the time comes to promote the individual.
Some boards delegate this responsibility to the compensation (or human resources) committee while others treat it as a full board responsibility. Either approach works and, since it’s a continuous responsibility, it should be reflected in the charter of the board or committee as part of their annual responsibilities.
I’ll add that part of the succession planning process should include identifying individuals as emergency successors for each major leadership role, particularly the CEO.
I could also talk about what a strong, formal succession planning process looks like as well as what a career development planning process looks like. The latter is for the benefit of the employee while the former is for the benefit of the organization. The beauty of having both of those processes in place is that they overlap, with the common denominator being the individual’s career development plan.
A well-done career development plan will identify the competencies needed (these come directly from the position description) and the individual’s development needs (these come from assessing which competencies are underdeveloped) and lay out the plan for achieving them. The career development plan will prove to be extremely valuable to both the employee (for their own personal development) and the company (for succession planning).
At its core, the board’s role includes ensuring there is a continuous pipeline of CEO-ready talent by actively identifying, evaluating and developing internal candidates, and maintaining an active view of the external market.
To hear more from Tony Brausen, register today for The Private Company Governance Summit 2026.