At the onset most organisations focus on how the organisation shall be established, it purpose and who shall be in the driving seat as CEO. Few organisations later take the time to focus on who shall take over should the CEO become incapacitated, retire or in a worse case scenario, should they be relieved of their duties.
It is acknowledged that considering who will take over in the last mentioned scenario is highly sensitive and uncomfortable. But it is necessary should the organisation seek to be sustainable and stable.
When pressed on the matter a number of directors admit that they are ineffectual at executing their CEO succession responsibility and more often than not they choose to delegate this responsibility to the CEO or avoid addressing the matter at all.
Boards should not seek to shirk their responsibility. They should rather seek guidance on taking tangible steps to address the matter. Stable and sustainable boards make CEO succession planning an annual exercise. Truly great boards ensure that they start the process as soon as they appoint their CEO.
Boards should strive to embark on a multi-year succession journey. During this process they should set and adhere to an attainable timeline and decide on what activities they will undertake during next 12 to 16 months. From the onset directors should clarify their role and that of the CEO. They can look to King IV and to various legislation for guidance. Part of this process should also include set out the skills and attributes needed by a prospective CEO.
When considering possible candidates to take over as CEO, the board should identify viable candidates within the organisation who may already be ready or require further training and support to make them as CEO-ready as possible. With respect to possible internal candidates, boards must observe and assess such candidates regularly over time.
Succession planning should not be seen as a waiting game. Boards can and should be proactive. By getting a handle on the succession plan for the organisation, the board ensures that the organisation will always have the best person at the helm. Boards should also ensure that the entire process is not only rigorous, but it must also be transparent, and fair.
The bottom line is that boards should look to place CEO succession on the agenda.