Less than one third of FTSE 350 companies establish succession plans for their chairmen, despite the increased turnover of chairmen over recent years. This is evidenced by research carried out by Heidrick & Struggles, a recruitment company, covering 70 of the FTSE 350 company chairmen (sitting on 97 FTSE 350 boards).
The lack of succession planning was not attributed to companies’ failure to acknowledge its importance: 75 per cent of respondents acknowledged the benefits of succession planning. Rather, this inertia was found to be driven by behavioural aspects, such as embarrassment, timing, and indecisiveness on how and who should initiate the process; ‘for the chairman it is like acknowledging his mortality and a non-executive director who brings it up is immediately seen to be presenting themselves as a contender’, noted Steve Tappin, partner of Heidrick & Struggles.
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