Who is going to replace your CEO? That is the question every Board and Director should be asking themselves on a regular basis. Appointing the CEO is one of the most important roles a Board has, and unfortunately too often they don’t think about it until the CEO is leaving, catching the Board unprepared.
While it can be thought awkward to begin planning for a new CEO while the incumbent is still around, it is still important to have a succession plan in place and be developing potential replacements within the organisation and identifying others external to it.
A recent report from PWC entitled ‘How the best boards approach CEO succession planning’ (read it here) tackles this issue and provides some very practical ideas for boards. The whole report is worth reading for the depth of ideas, but the following represent a summary of the top 7 factors of how the best boards deal with this tricky issue:
- They agree on the skills, experience and personal traits the CEO will need to execute the company’s current and future strategy.
- They know who owns the succession planning process.
- They have a documented plan with a timeline and established process for updating it.
- The have a well-defined emergency succession plan.
- They engage their CEOs in succession planning from day one.
- They have a strong pipeline program.
- They understand the importance of good onboarding, championing their chosen candidate and communicating the process to stakeholders.
The future of your company rests on the CEO – are you prepared for the next one?
The Avondale Business School can help you with your succession planning, to find out more contact Dr Warrick Long at [email protected]