Chief executive succession planning

Abstract

How do effective directors ensure that they have the right leadership for the organisation? Based on a framework of global corporate governance best practice, which can be used in all organisations anywhere in the world, this chapter of Questions To Ask (QTA) in the boardroom gives a high-level but succinct introduction to executive succession planning. Choosing the chief executive is arguably the most important task facing any board of directors. It follows that planning for the moment when one chief executive hands over to their successor is equally critical. A smooth and seamless succession process allows an organisation either to continue executing its strategy without unnecessary distraction or to send a decisive signal that change is underway. Conversely, a muddied or mishandled succession can undermine the organisation’s leadership, rupture key relationships, prompt unhelpful politicking and gossip, and deflect management from other core priorities. So how can boards be sure they get it right? The chapter’s introduction leads into the key Questions To Ask in the boardroom, giving the reader further insight into how any board of directors should ask themselves as they tackle one of their central responsibilities of hiring the right CEO.