Routes to the Top: Board vs C-suite Succession Strategies

Leadership turnover is rising rapidly – a trend expected to continue well into 2024, with companies facing an increasingly competitive market for C-suite and boardroom talent. In this landscape, well-developed leadership succession is vital to ensure continuity and financial sustainability.  

Odgers Berndtson’s recent research shines a light on the current state of succession planning. Surveying CHROs and CPOs, it shows succession planning is growing in both difficulty and importance.  

HR leaders know current market dynamics necessitate more robust and detailed plans that go deeper into organisations. Importantly, the research shows succession planning must recognise the nuances and distinctions between different leadership roles, if succession is to be effective.  

In this context, it is crucial organisations understand the difference between board and C-suite succession planning. 

Board succession impacts oversight, governance, and long-term strategic guidance, requiring a focus on diverse expertise and governance experience. C-suite succession, on the other hand, affects the organisation's immediate management and strategic execution. This requires leaders with operational expertise and a deep understanding of the company's culture and business model.  

Recognising these differences enables organisations to effectively align their succession strategies with their overarching goals, ensuring stability, compliance, and sustained growth amidst leadership transitions. Below, I’ve provided a guide for both, to help organisations plan their succession effectively. 

The board 

1. Advance Planning
   Succession planning should be an ongoing process that starts long before a vacancy arises. Regularly reviewing the board's composition, skills, and expertise helps identify potential gaps and allows for proactive recruitment. 
2. Clear Criteria
   Establish clear criteria for selecting board members based on the organisation's current and future needs. This may encompass specific skills, industry knowledge, diversity, and cultural fit. Clearly defining these criteria helps guide the selection process. 
3. Talent Pipeline 
   Create a talent pipeline by identifying potential candidates and developing their skills. This can involve mentoring, providing opportunities for leadership development, and encouraging board members to nominate potential successors. 
4. Diversity and Inclusion
   Ensure that diversity and inclusion are considered throughout the succession planning process. Encourage a diverse range of candidates to ensure different perspectives are represented on the board. 
5. Transparent Process
   Maintain transparency in the succession planning process. Clearly communicate the criteria, selection process, and timeline to all board members, encouraging their active participation and engagement. 
6. Succession Assessment
   Regularly evaluate the board's performance, including the skills and expertise of current members. Assessing the board's strengths and areas for development helps identify potential succession needs and ensures ongoing board effectiveness. 
7. Knowledge Transfer 
   Provide opportunities for knowledge transfer between outgoing and incoming board members. This helps preserve institutional knowledge, and enables smoother transitions, and means candidates get to grips with the position, rather than being thrown straight in the deep end.  
8. Succession Testing
   Conduct scenario planning exercises to simulate potential succession events. By evaluating how the board would handle different scenarios, organisations can identify any gaps or areas that need improvement in the succession plan. 

The C-suite 

1. Identify and groom High-Potential Employees Succession planning for C-suite positions should start by identifying individuals within the organisation who have the potential to step into leadership roles. These individuals should be given opportunities for development and training, to prepare them for future leadership positions. 
2. Develop a Leadership Pipeline
   C-suite succession planning should be an ongoing process that is integrated into the organisation's talent management strategy. This involves developing a pipeline of strong leaders at all levels of the organisation who are ready to step into C-suite positions when the need arises. 
3. Create a Structured Development Plan
   High-potential employees identified for C-suite positions should be given a structured development plan that includes opportunities for on-the-job training, mentoring, coaching, and leadership development. This should also include planned rotations and secondments to lead other business units, which provides leadership experience and improves retention by ‘keeping candidates interested.’  
4. Maintain a Diverse Talent Pool 
   A successful succession plan should include a diverse group of candidates who bring different perspectives and experiences to leadership roles. This can help to ensure the organisation has a strong leadership team that is equipped to address a range of challenges and opportunities.  
5. Conduct Regular Talent Reviews 
   Regular talent reviews should be conducted to assess the progress of high-potential employees and identify any gaps in leadership readiness. This can help ensure the organisation is proactively addressing any potential succession risks. These reviews can also help assess a candidate’s personal goals and motivations to ensure they align with succession needs, and mitigate any unexpected departures. 
6. Monitor and Track Progress 
   Succession planning efforts should be regularly monitored and tracked to assess the effectiveness of the program and make any necessary adjustments. This can help ensure the organisation is continuously improving its leadership development efforts and preparing for future leadership transitions. 
7. Communicate the Importance of Succession Planning 
   It is crucial to communicate the importance of succession planning to all employees within the organisation. This can help to create a culture that values leadership development and succession planning as a critical component of the organisation's long-term success. It also drives engagement, by showing employees the company values internal progression.  
8. Retain Unsuccessful Succession Candidates
   Organisations should make sure unsuccessful candidates are rewarded for their involvement in the plan, to mitigate them from leaving. For most, this will take the form of other leadership development programmes, education (such as MBAs), and coaching. Retaining unsuccessful candidates is critical; often, they can become disgruntled and leave, creating further leadership challenges. 

For both boards and the C-suite, it is highly beneficial for organisations to benchmark against the external market. Bringing in external talent into any succession process, enables organisations to understand how their talent, practices, and performance compares to others, revealing competitive strengths and weaknesses. 

Additionally, supporting both board and C-suite successor candidates once in the role is vital for their success – you can find out more in our guide on helping successor candidates ‘hit the ground running.’ 

Odgers Berndtson helps advise and guide organisations through every aspect of succession planning, from successor identification through to interviewing and leadership transition. For more information or help with your next leadership appointment, get in touch: mark.odonnell@odgersberndtson.com