Belinda Hutchinson

For­mer chair QBE In­sur­ance, direc­tor AGL, State Li­brary of NSW, Aus­tralian Phil­an­thropic Ser­vices; chan­cel­lor, Uni­ver­sity of Syd­ney.

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

You said CEO in­volve­ment in suc­ces­sion plan­ning can be a jug­gling act. Can you ex­pand on that?

In a planned suc­ces­sion, you need bal­anced en­gage­ment of the CEO in the process. It’s the board’s role but it must take the CEO on the jour­ney. I don’t sup­port – as some non-ex­ec­u­tive di­rec­tors do – cut­ting the CEO out com­pletely. This could just get them off­side.

Would you have the in­cum­bent CEO re­view the job de­scrip­tion?

Get­ting the CEO in­volved in the job de­scrip­tion is help­ful. They can add value to the process be­cause they know the com­pany bet­ter than any of the board mem­bers. Plus they know the in­ter­nal can­di­dates bet­ter than the board does. Their in­volve­ment must be framed as the in­cum­bent con­sult­ing on – but not con­trol­ling – the process. At the end of the day, it’s the board’s de­ci­sion and CEOs worth their salt know that.

How dif­fi­cult is it to change a CEO who has, in the main, been a good per­former?

You may have a CEO who has been out­stand­ing in build­ing a com­pany, but you may need some­body with dif­fer­ent skills be­cause the world changed and the busi­ness model along with it. This can be a real chal­lenge for the board. You may have deeply thought out emer­gency plans, but if you have a CEO who doesn’t see the need for change – and you don’t have board co­her­ence on the tim­ing for suc­ces­sion – it can be a real chal­lenge.

Do you run the risk of los­ing some pos­si­ble suc­ces­sors if they have to wait too long?

You will prefer­ably have lost some of the suc­ces­sors. And when you’ve had a very strong CEO, you may have a num­ber of sec­ond-in­charge ex­ec­u­tives but not with the strength to be suc­ces­sors. An­other risk is suc­ces­sors who aren’t quite ready when they are ap­pointed. It is then up to the chair­man to de­vote sig­nif­i­cant time to help them. They need to step up and spend the first six to 12 months set­tling in the new CEO. A crit­i­cal suc­cess fac­tor is the chair­man’s en­gage­ment.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.