• A 2014 survey said 86% of leaders believe leadership succession planning is important, but only 1 in 6 thought they did it well.
• By 2019, only 35% of organisations have a formal process for succession planning in place.
• In 2020, 70% of leadership development programmes had been pushed back by Covid-19.
• Strategy and business model should define the skills the board needs, leadership development programmes and succession planning.
• Basics of succession planning:
  • Board level vs CEO/executive succession planning
  • Allow for strategic as well as emergency succession
  • Maintain control – planning helps to keep decisions within the organisation
• What should organisations do? 
  • Create a robust, workable framework setting out the succession approach
  • Develop formal plans
  • Regularly review any plans, test them, create scenarios and risks.
  • Ideally, have more than one potential successor
• Where organisations go wrong with succession planning is usually because they don’t regularly review and test the plan.
• Organisations struggle with the scope of succession planning and only focus on the CEO so they miss the bigger picture of wider operational resilience.
• Boards struggle with succession planning because it usually isn’t in the spotlight. Less scrutiny of this type of planning has meant less attention.
• Because senior leadership changes don’t happen frequently, boards can be unsure how to proceed. That’s why it’s important to put in place best practices around succession planning.
• Questions for the board to ask include:
  • How can we communicate our approach to succession planning to stakeholders? 
  • What experiences are there around the board? 
  • How formal is the organisation’s approach to succession planning? 
  • What risks exist that will test our succession planning in the short and medium term? 
  • What succession planning experience do we have on the board and how can we harness it?
• Succession planning of the board especially in small companies belongs to the nomination committee which looks at skills and experience.
• The nomination committee need to think about the different profiles of potential board members when doing succession planning, for example, age, gender, ethnicity, geography experience, and professional experience.

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Here are three pieces of additional content:

What happens when management loses faith in the board?
When management loses faith in the board, it’s a problem. Management may feel that while the board has the expertise to turn strategy into results, it’s not using this expertise, and the company suffers.
https://www.thecorporategovernanceinstitute.com/insights/guides/what-next-when-management-loses-faith-in-the-board/

What is a board evaluation?
A board evaluation is when someone examines the workings of a board and its members, its effectiveness, the quality of its decision-making and strategy, and its relationship with the executive management.
https://www.thecorporategovernanceinstitute.com/insights/lexicon/what-is-a-board-evaluation/Leaders aren’t born.

They are madeKnowing how a board should operate is vital for your success as a director. You don’t want to be the member around the table that has to be brought up to speed on roles, responsibilities and ways of working.
https://www.thecorporategovernanceinstitute.com/insights/guides/test-your-leadership-skills-for-free/

A forward-thinking board will create a succession plan that reflects the varied and intricate issues it’s facing. Today’s changing business landscape demands this resilient approach. Having this plan in place means your board will have the right expertise and skillset to successfully navigate future challenging scenarios.

Join George Vlachos, Board Engagement Strategist & Corporate Governance Leadership Practitioner and James Beasley, Board Advisory for Europe, Middle East and Africa at Nasdaq for their insights on why succession planning is important and how to use it to identify skills gaps in your board. Discover why now is the right time to start implementing your board’s succession plan. Leave the webinar with a clear idea of who to involve in implementing the plan and how to get started.

George is an international director who provides corporate governance services across Europe. He was previously regional managing director for Mattel. His expertise is in helping organisations with their strategy and organisational development.

James is Head of Board Advisory for Europe, Middle East and Africa at Nasdaq. He is a governance and board effectiveness specialist working with some of the world’s largest organisations. James joined Nasdaq from Deloitte, where he spent eight years in governance advisory, latterly as a Director leading the organisation’s board effectiveness and broader governance transformation activities. Based in London, James has experience supporting clients internationally throughout Europe, North America, Africa, and the Asia-Pacific region.