Uncertainty at the top of a company is never a good thing. The board controls the company, but the chairman leads the board. Increasing scrutiny around how boards operate, calls for greater transparency and consequently the increasing importance of the chairman’s role creates a strong case for succession planning. Yet there is scant overage of this issue or attempts to capture and share views on what constitutes current best practice.
During the first half of 2006, the Board Practice of Heidrick & Struggles embarked on an initiative to address this lack of information through a series of one-to-one conversations with seventy FTSE 350 chairmen. The research revealed that while three quarters of those chairmen agree with the idea of proper succession planning for their role, only 25-30% of boards have any such arrangements in practice. This is a curious inconsistency in light of the commitment to talent and succession planning for executives which is seen as central to most successful companies.
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