R. Douglas Harmon, of Parker Poe Adams & Bernstein LLP notes that few things are more important to a company’s success than identifying, hiring and retaining an effective CEO, and yet many boards of directors pay scant attention to succession planning.
Mr. Douglas also notes that Stanford’s Rock Center for Corporate Governance and the Institute for Executive Development have issued their 2014 Report on Senior Executive Succession Planning and Talent Development, which emphasizes the ongoing severity of this issue, and he summarizes the Reports key findings as follows:
- Companies do not know who is next in line to fill senior executive positions.
- Companies do not have an actionable process in place to select senior executives.
- Companies plan for succession to “reduce risk” rather than to “find the best successors.”
- Roles are not defined and often they are not followed.
- Succession plans are not connected with coaching and internal talent development programs.