Internal appointments have a far greater chance of success than external ones. (This is something few headhunters will tell you.) So grooming successors matters not just to facilitate seamless transitions but to make it more likely that everyone in the organization will succeed.
Instead, this company now finds itself frantic in a search for that top spot, still blind to how few candidates they have for the many vacancies that will be revealed in the next few years.
You could–and I do–ask where HR is in this scenario. But the deeper question is this: if no one is paying attention to the people who drive the business, everything else is in jeopardy.
The healthiest companies are always characterized by organic talent development. Any time a company makes a big, expensive outside appointment, shareholders and employees beware.