The selection of the CEO is one of the most important decisions that the board of directors must make.  The board should have an understanding of the skills and experience required to lead the company going forward.  It should also understand the necessary behavioral attributes, including ethics, cultural fit, work style, risk tolerance, competitiveness, and leadership.

There are four models of succession planning:

• Recruit a CEO from outside the company
• Appoint a chosen successor to be groomed for the job
• Stage a horse race in which two or more internal candidates compete for the CEO position
• Develop internal candidates and evaluate them in relation to external candidates

The appropriate model will depend on several factors, including the quality of talent within the company, whether or not company operations and strategy require significant change, and the expected time until a transition.