For centuries, horse races have provided an adrenaline rush for bettors, who place wagers on the winning racehorses. These contests have evolved into a massive industry that requires sophisticated electronic monitoring equipment and enormous sums of money, but the basic concept is unchanged: two or more horses race against each other in a test of speed and endurance. The most recent winner is declared the victor, and bettors win if they make the right picks. This process has also been adapted to corporate leadership, and some companies use it to identify their next chief executive by holding an in-house “horse race.” While many directors are intensely fearful that a succession horse race will lead to a loss of business momentum, others say the approach can be effective when executed well.

During the Breeders’ Cup race at Santa Anita in 2023, trainers and track officials were obsessed with the safety of their “equine athletes.” They flooded the area with veterinarians and expensive imaging equipment, examining the horses’ bones, joints, muscles, and ligaments for preexisting conditions that could contribute to injuries. They tested the horses’ blood for performance-enhancing drugs and pain relievers before and after morning workouts, and scanned their ears with a special device to listen for signs of lameness.

But, despite these efforts, horses died from injuries and other causes at an alarming rate. Injuries to the limbs, especially the ankles, were the most common cause of death, and the ailment often resulted in a trip to the auction or slaughterhouse. Trainers abused the animals, over-medicated them, and over-trained them. It’s no wonder that the U.S. lags behind other countries in basic horse racing safety.

The best way to understand the horse race is to watch a live one. In the walking ring before a race, bettors study a horse’s coat to see if it is bright and rippling with muscled excitement. If a horse balks at the starting gate, it is not ready to race and may suffer an injury in the process. Trainers are known to inject horses with illegal substances to improve their performance and mask pain. A horse that is injured in a race can be sold to another owner without disclosing the injury and can end up spending the rest of its life at a slaughterhouse.

If a horse’s coat looks dull and dingy in the starting gate, it’s not ready to run. Similarly, if a CEO’s replacement is not visible in the executive suite or on the boardroom floor, it can be an indication that the company is in trouble. The executive team should be rethinking its leadership structure and consider implementing a new strategy to find the next great leader. This may include an in-house “horserace” to select the top candidates, but it should also focus on building the skills of senior-level executives so that they can be prepared for future leadership opportunities at the company.