One of the many crucial roles of the corporate board is the successful management of CEO succession planning, and the task is becoming more complicated and more urgent in our evolving corporate world.
Spencer Stuart, one of the world’s leading executive search firms, has long been a thought leader on this vital function; they provide an update on some of the challenges confronting boards’ CEO succession planning in this June 2021 report.
Technology and business model shifting
“Technological disruption, shifting business models and the rise of new competitors were already shaping business,” Stuart Spencer reports.
Social, political and environmental forces
“Now social, political, and environmental forces are accelerating their impact on businesses—requiring CEOs to lead on issues such as social justice and equity, climate change and other ESG issues and be prepared to comment on them. All of this is making the job of CEO more challenging.” These rising challenges confronting today’s CEO also are presenting a growing number of stakeholders to which CEOs are ultimately accountable.
All this means that CEO succession planning, always a vital board function, is becoming even more increasingly vital and challenging to corporate boards.
CEO traits and skills
But how should corporate boards respond to this escalated challenge? Like many other challenges confronting boards, planning is the key. Boards need to very clearly define the characteristics and traits they seek in their next CEO and begin planning earlier, assessing an even greater number of potential candidates.
Specify and plan
With specificity in the demands of the job, more time, and a broader range of candidates from which to select, boards will be well-positioned to face the increasingly complex challenge of identifying a CEO successor.