Partner News: CEO succession – do you have a plan?
A change in CEO, whether planned or unplanned, is a critical event for any organisation. If handled badly it can be disruptive and costly to an organisation. On the other hand, a well-planned succession, can provide confidence to external and internal stakeholders, and help with a smooth transition to a new CEO.
Do you have a plan?
Who is responsible? It is clearly the responsibility of the Board to appoint the CEO and ensure that at all times there is an up-to-date and practical succession plan in place for not only the CEO but other senior executives.
Whilst the detail and execution of the plan may be delegated to a Board sub-committee, the Board should at least once a year (probably twice) review the plan and have a formal discussion about succession.
What’s a typical plan include?
A good CEO succession plan is part of a broader framework covering professional development and leadership for the executives in an organisation, and importantly be part of a framework for feedback to the incumbent CEO.
Key elements of a good succession plan:
- Most importantly and obviously, is in writing, regularly reviewed, up-to-date and will provide guidance through the process.
- Provides clarity around the Board’s/Board sub-committee/CEO responsibilities – this is critical to ensure commitment and involvement.
- Is aligned to the 5- and 10-year strategy and direction of the organisation and looks at various scenarios. This helps identify critical capabilities needed in the leader/CEO.
- Is integrated with the performance management, recruitment, selection, development and rewards framework.
- Includes a process for emergency succession – ie short term and interim, including guidance on external or internal appointments.
- Includes a communication plan that covers key external and internal stakeholders.
- Includes regular discussion on viable internal and external successors, although this should be part of a broader framework for talent development of the organisation’s executives.
- Includes guidance for the recruitment/search process including the role and responsibilities of the various parties.
The new year is an ideal time to put CEO/Executive succession planning on the agenda, whether that’s a review of what’s in place, or to start to develop one.
Brown and Chase is a boutique Australian-owned Executive Search and Talent Acquisition firm with strong credentials and significant experience in working with the Boards and CEO’s of NFP’s and professional and industry associations. If we can help with Executive Search and Selection, Talent Mapping, Succession Planning, Board appointments and reviews please contact us. Noel Rowland, Partner, Brown & Chase. Mobile: (0414) 278.279