Board Governance & CEO Succession Flashcards
7 cards from real CSP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Board Governance & CEO Succession flashcards as text
Which board committee is most commonly tasked with overseeing CEO succession planning?
Answer: Nominating and Governance Committee
The Nominating and Governance Committee typically has primary oversight responsibility for CEO succession planning as part of its governance mandate.
What is the primary purpose of an 'emergency succession plan' for the CEO role?
Answer: To ensure continuity if the CEO becomes suddenly unavailable
An emergency succession plan ensures the organization can continue operating if the CEO becomes suddenly incapacitated, deceased, or otherwise unavailable without notice.
When a board evaluates internal CEO succession candidates, what is the recommended approach to candidate development timelines?
Answer: Maintain a rolling 3–5 year development horizon for top candidates
Best practice calls for a rolling 3–5 year development horizon so that candidates gain meaningful experience across business cycles and diverse challenges.
A board is selecting a new CEO during a strategic pivot toward digital transformation. Which criterion should weigh most heavily in this context?
Answer: Digital literacy and technology leadership competency
When the strategic direction requires digital transformation, the board must prioritize competencies aligned with that strategy, making digital leadership capability the most critical selection criterion.
What does 'board refreshment' mean in the context of CEO succession planning?
Answer: Adding directors with skills aligned to future strategic needs
Board refreshment refers to proactively adding new directors whose skills, perspectives, and competencies align with the company's evolving strategy and future CEO oversight needs.
Which disclosure requirement related to CEO succession is enforced by the SEC for public companies?
Answer: Risk factor disclosures must address key-person dependence and succession risk
SEC rules require public companies to disclose material risks, which can include key-person dependence; however, detailed succession plans themselves are generally not required to be publicly filed.
How should a board handle the situation where the outgoing CEO strongly advocates for a specific internal successor?
Answer: Use the recommendation as one input while conducting an independent assessment
The board should treat the outgoing CEO's recommendation as valuable input but must conduct its own independent evaluation to fulfill its fiduciary duty.