Dr Helen Nugent
Chair, Veda Group, Funds SA, National Portrait Gallery; director, Origin Energy; chancellor, Bond University; president, Cranbrook School.
When should CEO succession planning start?
I am increasingly of the view that starting succession planning in year one of a CEO’s term is really important and it should be positioned as board best practice rather than a search for a replacement CEO. When started early, the process becomes more about leadership development and making sure that for five years, 10 years or whatever the timeframe might be, you’ve got an open dialogue with the CEO on succession.
Some CEOs are sensitive about any form of succession planning.
There are some fragile egos, which is usually an indicator of how they deal with and manage their staff. Most organisations undertake some form of succession planning. It is important that we think seriously about staff development to make sure they are ready for the roles. This includes exploring external training, working in different roles or other experiences you can give them. It needs to be considered very systematically throughout the organisation, with the board focused on the most critical roles.
There are more boards doing it now than a decade ago. People recognise the value of having good internal succession.
There are some organisations that are so idiosyncratic that an external person would never be truly in the running. They wouldn’t understand the organisation. They wouldn’t know the people and they wouldn’t command respect.
What are the elements of leadership development for CEO successors?
It is in-depth work, not just discussions, and it is done with people internally who could take over from the CEO and also the people who are the successors to the next level down. You have different levels of intensity. Some people need one-on-one coaching, and the board needs to be assured by external advisers or another means that the messages are really getting through to identified succession candidates. You also create opportunities for those people to present regularly to the board so the directors can see how they are developing over time. Regular strategy presentations or informal lunches or dinners can also help you see whether or not the leadership gaps you’ve identified are, over time, being filled.