Dr He­len Nu­gent

Chair, Veda Group, Funds SA, Na­tional Por­trait Gallery; direc­tor, Ori­gin En­ergy; chan­cel­lor, Bond Uni­ver­sity; pres­i­dent, Cran­brook School.

The Australian - The Deal - - Take The CEO Challenge -

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.

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