- Home
- Publications & Resources
- Perspectives
Succession Management: The Role of the Board and the CEO in Ensuring Business Continuity
Abstract
Asked about his succession plan, the CEO of a major U.S. corporation recently responded that he carries in his pocket a paper with the name of who should be installed in his place if he is unable to continue. This dated and dangerous "hit-by-a-bus" plan is far more common than many organizations would care to admit.
Succession management – the practice of carefully identifying and selecting talent to succeed incumbents in a company's critical roles – is receiving renewed focus, especially at publicly traded companies. Activist shareholders want to know how the organization will change direction when turnover occurs, and institutional investors need to assess the thoroughness of succession management as a criterion for investment decisions. Moreover, internal stakeholders want to be assured that their leadership is doing more than worst-case disaster planning. Even governmental entities need to know that their investments are protected from a leadership vacuum. The primary responsibility for succession management should rest with the board of directors and the CEO with the assistance of Human Resources.