Corporate succession planning is the process of passing on important roles within a company to new leaders. It’s important for an organization to have a strategy to weather the change, and all too often companies do not anticipate that key employees will not remain stationary. Operations can become dependent on an executive and then come crashing to a halt when that person leaves for better opportunities, retires, or passes away. Succession planning is important for any leadership position, from a CEO role to an active board membership.
Successful successions require a certain level of training and mentorship. To effectively prepare for a change in board leadership, you must identify the knowledge and skills that the position requires and look for potential replacements inside and outside the organization. Individuals should be screened on criteria like previous training, experience, and devotion to the organization’s mission.
It is important that even an internal candidate is trained well and quickly so that when the time comes they are fully prepared. If replacements are merely identified, there may be a “gap” where operations come to a halt while the new person adjusts. New leaders may not need much mentorship, but they will always need new knowledge and a strong grasp of the company culture.
Board Management terms are reevaluated and updated every year, or whenever the company decides to make a change. As companies grow, more people are impacted by these changes. For this reason, it’s important to have an emergency information backup that includes the board’s key needs and details the reasons for the board’s current setup, in case the primary decision-maker leaves.
One way to ensure a successful transfer of information is to have potential leaders shadow existing leaders. This can be done by occasionally inviting candidates to board meetings and letting them have a role in some of the decisions the board makes. This is also a helpful way for you to observe them in action. Leaders can present test cases to the candidate to see their problem-solving skills or include them in activities that involve setting goals, budgets, or strategic planning to witness their initiative. It’s important that not only the existing leader approves of the individual, but that other board members have favorable reactions. Ultimately, the right person must bring something new to the table: if the candidate acts exactly like the other members, then he or she may not be the best choice.
The keys to a successful succession plan are a clear grasp of current leadership roles and a constant awareness of potential replacements. The simple act of identifying strong leaders is helpful until a specific opening arises.
Additionally, your board should outline the most important company information in a format that is easy to share with successors in an emergency. More than one person should be always aware of how board management software and other operational tools are set up and why.
Finally, when candidates are identified—especially if an existing leader has given good notice of their departure—candidates should have the opportunity to participate in test situations that prove their competence and suitability with other members of the board.
If you have any questions about the operations of Board Management software, please see our board feature page or contact us to learn more.