Carey Oven is National Managing Partner and Bob Lamm is Independent Senior Advisor at the Center for Board Effectiveness, Deloitte & Touche LLP. This post is based on their Deloitte memorandum.
Deloitte’s Chief Executive Program has engaged in a series of dialogues with current CEOs as well as those who are (or were) considered for CEO roles. The following is a high-level thematic summary of the Program’s work on succession planning, with a focus on how boards might improve their strategy in this area.
It is no secret that the number of areas involving board oversight has increased dramatically, especially in recent years. The role of the corporation in society, workplace strategies, and climate change are just some of the newer topics that boards are expected to address. And of course, this is in addition to the many perennial items of governance like risk management and guiding the company’s long-term strategy.
It may be a truism to say that every topic on the board’s agenda is important. But governance experts generally believe that CEO succession is among the most important director responsibilities. [1] The CEO is usually the most visible and prominent position within a company. [2] When things go well, an effective succession planning strategy can result in a CEO with transformative leadership potential who executes on the company’s long-term vision and adds value for shareholders and other stakeholders. [3] And, just as importantly, business history is littered with cautionary tales of what can happen when the succession process goes awry. [4]