The Governance Blind Spot: Part Three: Why Boards Must Look Beyond Today’s CEO Profile

Boards frequently evaluate successors based on current operational conditions rather than future strategic horizons. AICD, PwC and other global governance advisory firms consistently warn that this short-term approach undermines organisational resilience.

Boards must anticipate what the organisation will require from its CEO in five to ten years and design succession structures accordingly. The following case examples demonstrate the risks of focusing on the present instead of the future.

Real-World Example: Intel – Long-Term Innovation Decline Linked to Poor Succession Foresight

Problem

Intel maintained a pattern of promoting internal operations-focused leaders at the expense of future strategic needs. As competitors surged in advanced chip design, Intel experienced loss of market leadership.

Governance Failure

Successive CEO appointments did not align with long-term technological shifts.

Fix

Intel appointed Pat Gelsinger, a leader with deep technical and innovation credibility, and re-engineered its succession profile to emphasise future capability, not past structure.

Real-World Example: Telstra – Revising Leadership Strategy to Support Transformation

Problem

Telstra faced digital disruption, declining legacy business revenue and rising customer dissatisfaction.

Fix

The board appointed Andy Penn, followed by Vicki Brady, as part of a long-term transformation agenda. Leadership capability requirements—digital, regulatory, customer and cultural—were explicitly built into Telstra’s multi-year CEO succession profile.

This reinforces PwC’s succession planning principle: define future capability before assessing candidates.

Real-World Example: Westpac – Rebuilding Leadership After Governance Failures

Problem

Following AUSTRAC’s enforcement action in 2019, senior leadership credibility eroded.

Governance Failure

The board required leadership capability that went beyond operational management—prioritising risk governance, regulatory repair and cultural reset.

Fix

Westpac appointed Peter King as CEO (initially as interim), then formalised succession by aligning the capability profile with remediation, risk elevation and cultural transformation. Leadership development across the executive team was restructured to create a stronger future pipeline.

These examples reflect a central governance message: boards must define future CEO capability before evaluating candidates. This principle is reinforced across AICD guidance, PwC’s nine actions for effective succession planning, and Russell Reynolds Associates’ research on long-term pipeline development.