Fresh air in the Boardroom is vital for Board renewal
Succession planning is a key strategic role of any Board. Without good succession planning the organisation will struggle to thrive or even survive and provide the support that the executive needs.
Succession planning should be informed by the strategic plan and upcoming retirements as Board members come to the end of their terms.
However, for me the strategic plan provides the greatest influence. The plan will set out the vision, ambition and the strategic objectives of organisation. This in turn will imply the type of skills and experience that a Board and Executive will require to deliver on its strategy. Some skills / experience will need to be replaced or enhanced to achieve their objectives.
Assuming a Board is constantly ambitious, then the horsepower required of a Board will need to be boosted on an ongoing and planned basis. This is taking a professional and strategic view of the shape of the Board going forward and the skills, experience and competencies required.
Planning should take account of the worst-case scenarios such as the Chair or CEO being unavailable for whatever reason. Planning for Board room succession is easier than with Senior Executive transition as the Board will see less of them than they will of their colleagues. Hence the need for a more systematic approach.
A Board will quickly become unfit for purpose if there is not a constant flow of fresh air in the room brought about by new members, greater diversity, new ideas and constructive challenge.
Seamless succession planning is the hallmark of any good organisation and generally will not hit the media as poor succession planning could. Board terms will be a factor in this and must be carefully planned to ensure Board and Management alignment with the strategic ambition of the organisation.
Succession should be carefully planned for by the Board itself or the nominations committee. It is an ongoing dynamic process. Appointments that are not well thought through will waste a seat at the Board room table.
Good Boards are constantly scanning the market for new Boardroom talent like any good football manager seeking to recruit the talent to win the UEFA Champions League Cup.
Part of the succession challenge at Senior Executive Level will be deciding between developing and promoting from within versus external recruitment. Every situation is specific and must be treated accordingly.
Predicting the talent that a business will need for its next stage of development is difficult. The NomCo’s job is to make sure the right talent is around the board room table. Independence and objectivity come to mind!
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David W Duffy