How Toll Brothers took the drama out of CEO succession

Mistry joined the company in 2004 as an assistant project manager through its executive training program and advanced steadily through operational roles. His appointment makes him only the third CEO in the company’s nearly 60-year history, reflecting a deliberate preference for leaders shaped within the organization rather than recruited from outside.

At Toll Brothers, leadership development functions less as a human resources initiative than as an organizational risk management strategy. By progressing through the business from the project level upward, Mistry developed a working understanding of the company’s operations, culture, and decision-making norms that could take an external hire years to absorb—if at all.

The fact that Mistry is only the third CEO also underscores the company’s unusually long leadership cycles. Founder Robert Toll led the firm for roughly 43 years, followed by Douglas Yearley’s tenure of about 15 years. This stability allows the board to operate on longer strategic horizons and reduces the disruption that often accompanies leadership turnover in large organizations.

A related feature of the model is direct, high-level mentorship. Yearley has described how Toll personally spent years mentoring him on Monday nights, institutionalizing the transfer of knowledge across generations of leadership.

Of course, this is not to suggest that external leadership is inherently inferior or a failure of governance. In periods of strategic disruption, declining performance, or structural change, boards often turn to external leaders precisely because discontinuity is what they seek.

But in firms whose competitive advantage rests on execution, institutional memory, and long-cycle decision-making, leadership continuity becomes a strategic asset. The broader implication is that Toll Brothers treats succession as a long-term design problem, rather than a periodic crisis. Instead of relying on external searches when transitions arise, it has invested in talent early, tracked it over time, and created credible internal pathways to senior leadership.

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Ruth Umoh
ruth.umoh@fortune.com

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