Source: Fortune.com
Summary
The Nordic and Benelux regions have distinct corporate governance models, with employee representation in Nordic countries and separate management and oversight in the Netherlands. A Heidrick & Struggles report found that 50% of CEOs in these regions face doubts about their ability to lead in the next two to three years. Long CEO tenures and internal promotions may contribute to this mismatch. Experts suggest boards need to rethink succession planning and consider external candidates to adapt to rapid changes in the business environment.
Our Reading
The numbers tell one story.
CEOs in the Nordics and Benelux stay in their roles longer than in other markets.
Internal promotions dominate, with little outside perspective.
Boards struggle to find leaders who can drive change.
Consensus-driven cultures may expose leadership gaps more openly.
Author: Evan Null
Tenure may be the culprit
The average tenure for Belgian CEOs is nine years, the second longest in Europe. In Sweden and Norway, it’s seven years, while Finnish CEOs have the shortest average tenure at two and a half years. This long tenure may contribute to a mismatch between CEO capabilities and the evolving needs of the company. Boards are struggling to find leaders who can navigate rapid changes in the business environment. The report suggests that current CEO strengths may not align with future strategic needs.
Insularity may be compounding the problem
There is a preference for promoting leaders from within in parts of the Benelux. This can limit the introduction of fresh perspectives. In the Netherlands, internal candidates spend more time at a company before becoming CEO. Insiders bring deep knowledge but may lack the external perspective needed during periods of turbulence. External CEOs tend to outperform in times of change. The traditional approach to leadership may not be sufficient in today’s dynamic business environment.
Retiring the old playbook
Succession planning is often too passive, with pre-anointed candidates. This approach may not work in a rapidly changing environment. Naming an heir apparent years in advance risks misalignment with current needs. Boards should avoid naming a single successor too early and keep multiple candidates in play. Ongoing feedback and reflection on the CEO’s leadership are essential. Early identification of candidates may lead to less strategic change once they take the top job.
Candor, not crisis
The report findings may not indicate dysfunction but rather a willingness to admit misalignment. Governance structures in the Nordics and Benelux are designed to surface disagreement. This may lead to more candid survey responses. Consensus-driven models may reveal leadership gaps more openly. Boards in these regions may report more uncertainty due to their governance practices, not necessarily because of poor performance.
Leadership in a changing world
Even the most deliberate boardrooms can choose leaders built for the past, not the future. The challenge is to adapt to new realities. Boards must consider both internal and external candidates. The right executive team is as important as the CEO. Leadership gaps highlight the need for more flexible and forward-thinking governance. The Nordic and Benelux regions may be ahead in transparency but still face challenges in adapting to rapid change.
