Chapter 9The Other Succession ChallengeThe Board of Directors
- Why a Board Needs to Plan for Succession
- Demographics and Board Service Realities
- Enron, the 2008 Financial Collapse, and Dodd-Frank
- Building a Board Succession Plan
- Single-Issue Candidates
- Onboarding a New Director
- The Chemistry Factor
- Chapter Summary and What's Next
We outlined in Chapter 2, “Role of the Board,” the three critical questions that a board must address: (1) Does it have the right chief executive officer (CEO)? (2) Does it have a robust succession process and plan that includes agreement on a short-term successor? (3) Does it have the right strategy, and is that strategy being effectively implemented? This chapter adds an important fourth question: Does it have a succession plan for the board itself?
Why a Board Needs to Plan for Succession
In many ways, a corporate board follows a set of operational principles that mirrors the priorities of the company it serves. In clear terms, high-performing boards have a consistent focus on ensuring that individual members have the relevant skills and experience to meet the current challenges and risks faced by the company.
A February 28, 2015 issue of IQ Insights from State Street Global Advisors (SSGA), written by Rakhi Kumar, head of Corporate Governance, addresses this issue directly: “State Street Global Advisors believes that board refreshment and planning for director succession are key functions of the board.” The article goes ...
Get The Director's Manual now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.