Historically, board succession planning has been tied to episodic changes, such as retirements, resignations and term limits. The Nom and Gov committees worked with expected changes as they anticipated or arose. Currently, some boards still hesitate on succession planning and are not comfortable facing tenure and changes and letting directors go. This leaves the board with no succession plan structure to meet the strategic goals and needs for leadership strengths and opportunities for searching for future board talent.
Succession planning is now based on strategic thinking about the future of the organization and the widening of board duties. Board responsibilities are more complex and succession planning is now a vital priority. Well past filling seats, selection is to create a future-ready board.
Wise boards are now proactive. They plan ahead for directors with skills needed for the board composition to meet the board and business challenges. For example, boards now seek directors with experience handling volatility and provide strategic perspective. Often they seek CEOs or executives with deep understanding and experience in the business and industry and skills to think and offer constructive ideas and options.
Research by BoardProspects, Inc. notes the evolution with key principles in play:
- Strategy frames structure, board composition and framing for the skills matrix needed for the future of the organization. Thus, succession is based on the strategy.
- The focus is to explore continuous improvements, dynamic chemistry and strong ways directors can contribute and get along.
- As change is constant, refreshment of the ideal talent on the board is now part of the job. It requires a steady review quarterly by the Nom and Gov committee.
New Succession Frameworks and Practices Underway
Steps to improve your board succession planning include:
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Plan Futuristically: Work from a view of 3-5 years in the future to anticipate skills needed and talent for maintaining continuity and historical knowledge.
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Define Director Talent from a Holistic View: Consider diversity of styles of problem-solving and board styles, along with skills, experience and expertise factors for board effectiveness.
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Develop Leaders:
Mentor high potential future leaders. Track director leadership eligibility to create a strong bench.
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Expand Director Experience: Rotate board committee roles to expand thinking and understanding. Rotate chairs to help build leadership capacity across the board.
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Ground Succession as a Key Governance Duty: assess needs quarterly, always source and consider potential candidates and present succession plans and results at board meetings to provide current focus. Hold timely discussions of future plans to avoid unexpected changes.
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Keep a Dynamic Skills Matrix:
Annually reassess the matrix to align with evolving strategy and identify skill gaps.
Composition Strongly Impacts Success
Boards deal with permanent changes daily. Every director is key to ideation, problem-solving and key decisions. If your board commits to refreshment and succession planning, it will contribute to your organization’s adaptability, creativity and long-term success.
If you need guidance on practices, kindly contact us for help. We also can assist in finding ideal talent for your board, based on our registry of 8000 qualified directors internationally.
For Current Studies Resources: BoardProspects, Inc. BoardSpan,Inc.
