A new survey has raised alarms over succession planning in Scottish businesses, revealing that fewer than half of Scotland’s CEOs believe they have the internal talent to take over their role.
The research, conducted by executive search firm Livingston James in collaboration with EY, highlights a worrying gap in leadership development across Scotland’s top firms, with only 47% of CEOs confident that someone within their organisation is ready to step up.
The comprehensive study, which surveyed and interviewed more than 120 CEOs and senior leaders across multiple industries, aimed to identify the key skills and characteristics needed for future CEOs.
The findings underscore the pressing need for organisations to prioritise succession planning to secure their future leadership. Functional leaders, including CFOs and COOs, expressed more optimism about their potential to take on the top role, with 56% believing they could one day become CEO.
AI and Cybersecurity Among the Biggest Challenges for CEOs
In addition to the concerns surrounding succession planning, the research revealed several challenges that are keeping today’s CEOs awake at night. Developments in AI, cybersecurity threats, and the fast-evolving landscape of technology regulation were identified as major concerns. CEOs reported that integrating AI into their businesses while ensuring compliance with tech regulations is proving to be a complex task, compounded by ongoing skills shortages in the tech sector.
Moreover, the survey showed that attracting and developing tech talent has become a significant challenge for business leaders across Scotland. The rapid pace of change in technology has made it harder for companies to keep up, creating further pressure on CEOs to find innovative solutions and recruit employees with the necessary skills.
Diversity and ESG Top CEO Agendas
Beyond technology, CEOs are increasingly prioritising workplace culture, diversity, and Environmental, Social, and Governance (ESG) responsibilities. These areas have become focal points for future leadership as companies look to balance profitability with long-term values. Improving diversity in leadership roles and making progress on ESG initiatives were highlighted as critical goals for the CEOs surveyed.
Interestingly, the research found that CEOs overwhelmingly rated improving the customer value proposition (CVP) as their number one priority, while other senior leaders, such as CFOs and COOs, placed greater emphasis on improving the employer value proposition (EVP). HR leaders, meanwhile, named ESG responsibilities as their top focus.
Resilience: The Key Attribute for Future CEOs
The study also examined the traits that will define successful CEOs in the years ahead, and resilience emerged as the most important attribute. Every CEO surveyed highlighted resilience as essential for future leadership, a sentiment echoed by chief commercial and operational officers. Additionally, emotional intelligence ranked highly among CEOs, with 80% identifying it as a critical trait.
However, a notable difference emerged among HR leaders, who unanimously chose humility as the top characteristic for future CEOs, suggesting that softer leadership skills are increasingly valued across industries.
Alistair Shaw, Director at Livingston James Group, commented on the findings: “With more than half of current CEOs doubting they have successors within their organisations, long-term succession planning has never been more vital. Companies need to identify and nurture future leaders early in their careers, ensuring they have a clear path to the top, while also focusing on bringing in diverse talent.”
Shaw added that the CEO role is undergoing a fundamental shift. Traditional leadership approaches no longer suffice, and today’s business environment demands purpose-driven, inclusive leadership that can inspire both employees and stakeholders.
Preparing for the Next Generation of CEOs
EY Scotland’s consulting leader, Tricia Nelson, emphasised the changing demands on CEOs, citing challenges such as AI, ESG, and increasing stakeholder expectations. “The role of a CEO has always been demanding, but modern challenges are making it even more complex,” Nelson said. “Resilience, vision, and adaptability are now the key qualities that CEOs must possess to thrive in today’s business landscape.”
Nelson also stressed the importance of developing a wide range of experiences, rather than relying on time spent in one industry or role, as the key to preparing future CEOs. “Success in the role requires a combination of strategic insight and strong leadership. Building the next generation of CEOs should be a top priority for boards and chairs,” she added.
The survey’s findings highlight the competitive advantage Scotland has in attracting global C-suite talent. Nelson pointed out that Scotland’s well-connected business community, alongside its strong ecosystem of education, industry, and government, positions it as a prime location for nurturing future business leaders. However, without a focus on proactive succession planning, many organisations risk being left behind in an increasingly competitive global market.
This research serves as a wake-up call to businesses to reassess their leadership development strategies, ensuring that the right talent is in place to lead them into the future.
