More Companies Are Picking Board Members as CEOs

The traditional path to the corner office is evolving. A growing number of companies are appointing board directors as their next CEOs, a trend that was once reserved for emergency situations. This shift reflects increased executive churn, a desire for strategic resets, and a changing composition of boardrooms.

The Rise of the Insider-Outsider

Appointing board directors as CEOs was historically a “break glass in case of emergency” strategy, used when a company faced scandal, illness, or a sudden resignation. While still not the most common route, it’s becoming increasingly prevalent. Data from Spencer Stuart reveals that in 2025, 19 of the 168 novel CEOs appointed among S&P 1500 companies were drawn from their own boards – the highest number since 2020 [Spencer Stuart]. This comes as CEO departures in the S&P 500 reached approximately 13% in 2025 [Spencer Stuart], creating both performance pressure and succession planning challenges.

While internal candidates – such as COOs and division heads – still dominate CEO appointments, boards are increasingly looking beyond those traditionally in the executive pipeline when a significant strategic shift is needed. The risks associated with extensive external searches, which often promise reinvention but can lead to disruption, are also contributing to this trend.

The Insider-Outsider Advantage

Board members offer a unique “insider-outsider” balance. They possess a strong understanding of the company’s strategy, capital allocation, and risk profile, but are not deeply embedded in day-to-day operations. This distance allows them to more easily reset priorities without completely abandoning the existing plan.

Recent Examples

Several recent appointments illustrate this trend:

• Constellation Brands: Nicholas Fink was named CEO in February 2026 after serving on the board since 2021.
• Match Group: Spencer Rascoff, a director, was elevated to CEO in 2025 to accelerate product and artificial intelligence initiatives.
• Bed Bath & Beyond: Marcus Lemonis, the executive chairman, was appointed permanent CEO in January 2026 following the company’s bankruptcy emergence.
• Science Applications International Corp.: James Regan was named permanent CEO in February 2026, having served on the board since 2023.

Succession Planning Evolution

These appointments don’t indicate a failure in succession planning. Internal promotions remain the primary path to the CEO role. Instead, boards are expanding the potential candidate pool and building more flexibility into their leadership plans, particularly given the current high levels of executive turnover.

The shift also reflects the changing profile of board members. A growing number of directors are active or recently retired CEOs with substantial operating experience. This creates a readily available bench of potential leaders within the boardroom itself, who can be evaluated over years of strategy sessions and crisis management before being considered for the top job. Governance advisors describe this as “succession by design.”

What This Means for C-Suite Contenders

The evolving landscape impacts aspiring CEOs. The bar for readiness is higher, as internal candidates now compete not only with peers but also with experienced directors who have already led public companies and have established credibility with investors. In times of volatility, this experience can be seen as lower risk.

Timelines are also becoming compressed. Boards are increasingly informally assessing potential successors within their ranks, meaning internal candidates must demonstrate enterprise-level leadership earlier in their careers. Waiting for a formal succession process may be too late. Executives aiming for the CEO position need to be visible in board discussions, gain exposure to enterprise-level risks, and articulate a clear long-term strategy.

However, there’s also an opportunity. Boards seeking directors for CEO roles often prioritize leaders who combine operational expertise with strong governance skills. C-suite executives who proactively engage with directors, serve on external boards, and broaden their scope beyond their immediate function can strengthen their candidacy. The more an executive embodies the qualities of a CEO, the more difficult it becomes for a board to choose someone else – even one of its own.