Share your results CBM2024 Survey, Melanie Nolen, Director Revealed: “A quarter [of respondents] “150 companies said they have no detailed plans in place for the CEO or other mission-critical roles.” Respondents to the 2024 RHR-CBM survey included more than 400 directors of publicly traded U.S. companies.
Another IMD survey from 2016 found that 58% of boards had no succession plan. Even without a direct comparison of the two surveys, it’s fair to say the issues and risks remain.
Both studies focus on publicly traded companies, likely because the data is easier to collect. Publicly traded companies are subject to more comprehensive independent oversight than privately held companies, including guidelines that require transparency about corporate succession plans and processes. That's why I find the lack of succession planning in publicly traded companies particularly worrying.
The board appears to be ignoring significant risks.
A smooth and effective leadership transition Any Organizations, whether non-profit, public or private, need to have the capacity and ability to develop succession plans, or at the very least, to have a proper and effective succession plan in place, which can lead to confusion, high costs and impacts on market and organizational performance, brand value, interpersonal relationships and more.
So, looking at the latest statistics, DirectorIt never ceases to amaze me, and (not surprisingly) succession planning is a regular topic among the CEOs and boards I advise. For others, succession planning can be a very uncomfortable topic to discuss, as I have noted in other articles. CBM.
Succession planning will reduce the impact.
A good succession plan mitigates the impact of unplanned departures. But succession planning is about more than just surviving a crisis. It is a critical part of your overall talent strategy and should be regularly reviewed and updated. The most effective succession plans are directly linked to your vision and strategic priorities. Succession planning informs leadership development and becomes a roadmap for building the capabilities your organization needs to achieve its objectives.
The board needs to ensure the sustainability of the organisation.
Good succession planning helps. Additionally, while the board's clear responsibilities are typically directed solely at the CEO (or executive director), it is in the company's best interest for the board to look beyond C-level executives. In fact, meaningful succession planning ensures that talent is readily available to fill key roles, wherever they may be. Board involvement has two key benefits:
• Identify specialized skills and expertise Losing them could be devastating. These capabilities are not typically found in the C-suite, but are distributed at all levels throughout the organization. They provide clear benefits to the business and are present in every discipline and function, at every level. The external perspective of the board can be extremely helpful in identifying the specialized skills needed for business today. and Their foresight encourages both boards and CEOs to take action and allocate resources to develop, maintain, or expand critical capabilities before they are urgently needed.
• effective order Inheritance There is a series of shifts (not a single shift) that each person must prepare for. Promoting an internal successor can set off a domino effect, creating openings at other levels and in different parts of the organization. When the board actively supports a strong, thorough succession planning process and assesses key competency gaps, it helps mitigate the broader risk of losing talent across the organization. Additionally, CEOs benefit by having their board not get bogged down in operational details, but instead engage in strategic thinking and enable a deeper, more meaningful connection between the board and what's happening on the ground.
Succession planning is a highly strategic initiative — one that accomplishes two of the board's most important functions: mitigating risk and promoting organizational sustainability. Whether the percentage of public companies without succession plans is precisely 25% or 58%, the conclusion is clear: too many corporate boards are ignoring critical risks.
