The Pitfalls of an Interim CEO

Welcome to the HBR Executive Agenda for March 26, 2026. In this issue: The Pitfalls of an Interim CEO HBR Executive Live: Driving Lyft into the Future New Playbook: How to Onboard a New Member of the Executive Team The Pitfalls of an Interim CEO Your CEO is suddenly out. It will take time to manage the succession, so you appoint an interim chief executive as you figure out your plans. Makes sense, right? Maybe not. Boards often view interim leaders as safe, temporary appointments, but it turns out investors don’t like them at all. Stock prices often fall the moment an “interim” selection is announced, and research based on a sample of companies from the S&P 1500 found that in the years following interim transitions, companies typically end up losing hundreds of millions of dollars of value. And yet boards frequently take this route: Nearly one-third of CEO successions currently involve interims. In a forthcoming article in Harvard Business Review, “Should You Appoint an Interim CEO,” a trio of co-authors who have done extensive research on CEO succession describe the risks involved in making what might seem to be a prudent move. And they provide insight on how to make sure your board has “interim readiness.” We’re giving HBR Executive subscribers exclusive early access to these insights. The authors—Nicolas T. Deuschel of Universidad Carlos III de Madrid, Robert Langan of Universitat Ramon Llull, Esade, and Christoph Mât, a senior client partner at Korn Ferry—conclude that successful companies don’t treat an interim appointment as a stopgap, but instead approach it as a special kind of succession that has its own distinct set of rules. Boards should constantly plan not just for succession, but also for these not-uncommon interim scenarios to help ensure that the transition periods don’t lead to value-destroying disruption. Interim CEOs can fall victim to some common pitfalls. If they lack the board’s full support, strategic decisions can stall. Some of their top colleagues will leave or effectively shut down. And investors and analysts will remain wary. To help avoid these traps, boards need to have clarity on several critical questions: What is the interim CEO’s mandate? In many transitions, the question doesn’t even get asked. Is the acting executive’s job to preserve continuity, maintain morale, and buy time as the board conducts a fuller search? Or have they been appointed to launch a reset? Clear communication internally and externally is critical to help ensure success. Where will the interim CEO come from? The authors’ research shows that insiders tend to perform better than outsiders. But internal candidates who are vying for the full-time job are also more likely to engage in “earnings management,” taking steps to inflate short-term results to bolster their long-term chances. Is the appointment a tryout for the job? About 25% of interim CEOs ultimately get the position. Tryouts can make sense, especially to see whether a candidate has the necessary capabilities to lead, but boards need to discreet about the process. They don’t want to inadvertently encourage excessive short-term focus or discourage other senior executives. Above all, boards should have a playbook at the ready for interim transitions. Here’s a checklist: Regularly assess transition readiness. Are executives ready to step up on short notice? Are there outside turnaround experts available who could come on board in a crisis? Match interim scenarios to capabilities. Different scenarios require different types of leadership: a fixer for crisis transformation, a steward for steady transition, and so on. Prepare interim playbooks. Document now what would happen in the case of a sudden transition. What role would the board play? What would the interim boss be empowered to do on their own? Prioritize communication. Ambiguity is not your friend. Craft precise messages for investors, employees, and key partners. At the end of the day, the difference between successful and unsuccessful interim periods isn’t luck. Boards should treat interim readiness as a core governance responsibility, not an afterthought. Driving Lyft into the Future Lyft CEO David Risher has said that 2026 will be a “transformational” year for the company, as it introduces autonomous vehicles and looks to evolve from a ride-sharing app to a “global hybrid transportation platform.” On April 15 at 11 am ET, he’ll join me to discuss what’s driving the company’s evolution. We’ll discuss: How Lyft is evolving its business model to compete—and win—in this new era How it plans to differentiate and carve out competitive advantage in a crowded, fast-moving category How it will stay relentlessly customer focused while navigating mounting margin pressure And, as always, we’ll take your questions. Register How to Onboard a New Member of the Executive Team Most leaders treat C-suite onboarding as an individual exercise, but bringing in a new executive reshapes the entire leadership team. Mishandling this transition can dilute the very impact you hired for. Our latest HBR Executive playbook explores how to thoughtfully integrate a new C-suite member in a way that accelerates trust, surfaces productive friction, and enables the new hire to elevate your executive team execution. Read more

The Pitfalls of an Interim CEO

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