What is the board's primary responsibility in CEO succession planning?

• A. Approving annual budgets.
• B. Negotiating executive compensation with the CEO.
• C. Overseeing CEO succession, ensuring leadership continuity, readiness, and alignment with strategy.
• D. Selecting external auditors.

Answer: (C)

In CEO succession planning, the board’s main job is to oversee the process to ensure leadership continuity that supports strategy and risk management. This means setting the criteria for a future CEO, crafting and maintaining a formal succession plan, identifying and developing both internal and external candidates, and ensuring a smooth transition when the time comes. The goal is to have a ready, capable leader who can execute the strategy and maintain stability for shareholders and stakeholders, even through change.

Other activities shown in the choices, like approving annual budgets, handling executive compensation with the CEO, or selecting external auditors, are important governance or management tasks, but they don't center on preparing for and guiding the leadership transition in the way succession planning does.