NACD Nominating and Governance Committee Chair and Risk Oversight Advisory Council: CEO Succession Planning
In brief: It is essential that directors adequately plan for CEO succession and ultimately choose a successor who can carry out the company’s future strategy. In the fall of 2017, the NACD Nominating and governance committee Chair Advisory Council and the Advisory Council on Risk Oversight, comprised of Fortune 500 company directors, met to discuss leading practices for CEO succession planning. From the discussion—cohosted by NACD, Heidrick & Struggles, PwC, and Sidley Austin—three key insights emerged for directors:
- Integrate succession-planning activities with long-term strategy oversight, with the nominating and governance committee leading the process.
- Look beyond the accomplishments on a CEO candidate’s résumé and extending additional consideration to more intangible qualities.
- Pressure-test the CEO pipeline as a part of the firm’s overall leadership development process.
- Use a transparent succession process to set clear expectations for CEO candidates.
- Identify and take steps to mitigate risks in the CEO-succession process.
Most relevant audiences: nominating and governance committee members, risk committee members, lead director, board chair, CEO, general counsel