The CEO had three predecessors, one of whom was outstanding. The other two were certainly well above average. He too came across as very competent but one problem was evident:
His associates were afraid of him.
It was not the abject "trembling in their boots" sort of fear you see in films featuring a tyrant CEO but nonetheless it was apparent that they were not comfortable in his presence. They laughed a little too long at his jokes and there wasn't the easy banter you'd expect among people who've known one another for a while. They became nervous when he entered the room and were too eager to please.
His inner circle didn't have any heavyweights; individuals who could easily fill his position and who would speak up if they disagreed with a decision. They were young and vulnerable and far too dependent upon his favor.
Time and experience may remove the fear and yet that is not a natural development. Street-savvy potential challengers tend to leave such environments. Since those who are left behind are pliable, there is less incentive for the CEO to change.
He probably thinks all is well.