Succession Planning: Burden Or Opportunity?
from National Association of Corporate Directors - New England Chapter
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Tuesday, May 13, 2008, 7:00am - 9:00am
Executive Management and CEOs in particular, have come and gone with increasing frequency. Not every company can line up and hold in reserve quality management to fill executive openings caused either by voluntary or involuntary changes. In the Age of SOX, the buck for CEO succession clearly stops with the Board. And while for the rest of the management team it rests with the CEO, it still is critical that the Board be involved and / or aware of backup plans for other key slots. What is best practice? What must directors do to succeed or avoid criticism - or worse? Which path is your board on? And what are your next steps?
Our panel of two experienced Chairmen / Lead Directors and a prominent executive recruiter will lead our discussion on how to do it optimally and what happens if it's not done well or if succession does not follow the plan. To quote a recent Directorship article - our goal as directors is to have "SUCCESSION WITHOUT TEARS".
Some of the topics our panel will consider include:
- How and when to start the succession planning process? How should the Board organize the process for the CEO and how involved should the Board be in the process for the other members of Executive Management? How and when to start the succession planning process? How should the Board organize the process for the CEO and how involved should the Board be in the process for the other members of Executive Management?
- How to develop selection criteria? What does the board do with the current CEO's input - particularly if they disagree with it and he/she are still in the job?
- What happens when the CEO sees the "CEO Succession Plan" as a threat and either in word or in deed stifles the process?
- When is it prudent to line up succession inside, or to go outside?
- How long should the process take and isn't it an iterative process as the company changes? If so, what does that mean in terms of what you tell inside candidates and others whom you wish to keep?
- Should there be a policy about whether the outgoing CEO stays on the Board? And if yes, what should that policy be? When you have defined your planned successor - how do you keep from losing executives who thought they should receive the job?
- When you have defined your planned successor, how do you keep from losing executives who thought they should have the job?
- What public disclosures must you make and when?
- How does all of this change in times of crisis? What kind of pre-planning can the Board take in addition to a succession plan? What are the best practices surrounding handling of a management crisis?
- What are the best processes for Candidate assessment?
- If this is a public company - are there special considerations?
- If this is a family owned company - are there special challenges and ways to resolve issues related to succession planning?
THE PANELISTS:
GEORGE L. DAVIS JR. is the Co-Managing Partner for Egon Zehnder U.S.A. In addition to Managing the Boston Office, George is Co-Managing Partner of Egon Zehnder's National Board Practice Group. Mr. Davis specializes in executive searches for Board Members, non-Executive Directors, Chief Executive Officers as well as a variety of C-Level assignments.
NANCY HAWTHORNE is Lead Director of Avid Technology, Inc. Avid, a NASDAQ-traded company based in Tewksbury, MA, is the world leader in digital media creation tools. Ms. Hawthorne has served on the board of Avid since 1997--as Chairman from May 2004 to May 2007, as Interim CEO from August to December of 2007, and as Lead Director since January 2008.
JOHN L. MCGOLDRICK is Chair of the Board of Zimmer, the world's #1 maker of artificial hips, knees and other orthopedic devices, where he has chaired the compensation and corporate governance committees. He is SVP of the International AIDS Vaccine Initiative, a global non-profit whose scientists work to find a vaccine to prevent HIV.
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