The NED path less trodden.
How NED-to-CEO moves offer advantages but require mindset shifts and careful transition management.
Appointing non-executive directors as CEOs can work well if they avoid the pitfalls; but there may be deeper challenges to overcome.
It’s a well-trodden career path. After years on the frontline, the CEO steps back to become a non-executive director (NED) or Chair of the company Board. It is much less common for an experienced NED to step into the CEO role. According to Odgers experts, the NED-to-CEO move may be a rising trend worldwide. Such appointments can be a shrewd move for both executive and company, if they can avoid common pitfalls. But it can also reflect deeper problems, such as crisis management, talent shortages or poor succession planning. For the NED, it may signal a lingering frustration and a desire to get back into the driving seat.
In the UK, 6% of current FTSE 100 CEOs and 3% of FTSE 250 CEOs were previously NEDs at their respective companies. Odgers in Sweden, for example, reports a rising appetite for NED-to-CEO succession, following recent high-profile success stories. Börje Ekholm moved from Ericsson’s Board to CEO in 2017 to help steer the company through a difficult period of market changes. In August 2025, Jonas Wiström, retired after eight years as CEO of industrial company Ratos, having previously been Board Chair.
Odgers in South Africa has observed a similar trend. Jurie Strydom, an independent NED on the Board of financial services group Old Mutual, was appointed its Chief Executive in May 2025. This follows other high-profile NED-to-CEO moves in South Africa’s financial sector, including Paul Hanratty who assumed the CEO role at insurer Sanlam in 2020 after three years on its Board.
Mis-steps and giant leaps
NED-to-CEO moves have obvious advantages. NEDs are usually already familiar with company strategy, culture and key debates and personalities. This allows the new CEO to get a running start. If the company has been through tough times, it signals to stakeholders that a period of continuity and stability lies ahead. They might also welcome a steady, experienced hand if the company faces economic headwinds, or is about to embark on a digital transformation that could upend the current business model.
The company may not want, or need, a cautious, steady hand, but rather a dynamic operator skilled at driving change throughout a large multi-tiered organisation.
However, there are good reasons why NED-to-CEO appointments are still relatively uncommon. The company may not want, or need, a cautious, steady hand, but rather a dynamic operator skilled at driving change throughout a large multi-tiered organisation. In such cases, by making a NED-to-CEO appointment, it may appear as if the Board is trying to avoid tough decisions. A long-serving NED might seem to lack a fresh perspective at a time when the company needs to embark on a new direction. Indeed, one might reasonably ask whether the NED’s heart is really in it.
Perhaps the most overlooked challenge of NED-to-CEO succession, however, is the transition phase itself. The CEO selection process can take many months. Rumours about who might apply circulate early on, raising questions about applicants’ independence, commitment and potential conflicts of interests – like an athlete in the process of transferring to a rival team, fans want to know if they are still committed to the current side. When one’s candidature is official, other Board members may legitimately ask whose interests are now being prioritised, especially as every decision taken as a Board member may be perceived as being part of the CEO interview process.
The prospective CEO must also continue to work alongside colleagues who may also have applied for the top job, allowing resentments to simmer. An external candidate might be better shielded from internal politics at this stage.
Once the NED has taken the first step on this CEO journey – successful or not – there may be no way back.
Nor can one convincingly argue that the NED-to-CEO creates a bridge between executive and non-executive. Even if the new CEO takes a while to adjust, the rest of the Board will most likely have moved on. Investors, staff and other stakeholders will almost certainly have changed how they relate to the new CEO.
The break must be decisive. The mindset change is hard. The new CEO suddenly becomes aware of details that NEDs may know little about, including potentially bad news. The CEO has to drill deeply into operations in ways that NEDs would not be expected to do.
As well as a new mindset, a successful NED-to-CEO transition requires a change in energy levels.
Deeper challenges
Mindset change may be the key to success. But in some markets, there can be deeper issues at play. South Africa presents a good example of these challenges. Although NED-to-CEO appointments in the country have been successful, some say that looking to the Board to provide leadership talent may reflect difficulties filling the talent pipeline in the first place.
The skills drain from South Africa definitely is a large contributor to the succession planning dilemmas, and the thinning pool of adequate talent being developed within organisations,” says one Board member.
Too many high potentials prefer to study or work abroad as a way to advance their careers, and they don’t always return. At the same time, South African companies say that it can be hard to attract overseas talent. The reasons vary: reports of crime, excessive bureaucracy especially when obtaining work permits, and an unwillingness to offer competitive packages, are but three.
Yet executives are keen to stress that future talent is there. It just needs guidance and time to come through. Companies need help identifying those with the skills, and setting out realistic pathways to the top. Future potential requires mentoring and coaching, especially to shift from a functional to a strategic mindset that a future CEO candidate would be expected to demonstrate. Perhaps most importantly, because much of the talent and experience is locally-based, future corporate leaders need exposure to an international business setting. This can take a further five years.
But it will be worth it by taking a strategic view and providing the right guidance, the NED-to-CEO path will not be viewed as an emergency measure but one of many successful routes to the top.
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