Board Succession Planning Resources
Board Succession Planning
Board succession planning is one process boards use to ensure continuity and competence. When done well, the board is prepared in the event of both the expected and unexpected and transitions can occur gracefully. The nominating and governance committee is usually responsible for board composition and will work closely with the corporate secretary who maintains board member data including: when the board member joined, any class or term, committee membership, age, any diversity characteristics, particular skills and any other relevant information, based on the organization. In some cases board members are appointed by elected or appointed officials or labor unions or church leaders, which is also noted. This data is regularly provided to the nominating and governance committee and at least annually the committee considers the information as part of its overall review of the board composition. This is considered a corporate governance best practice.
Board succession planning is one process boards use to ensure continuity and competence. When done well, the board is prepared in the event of both the expected and unexpected and transitions can occur gracefully. The nominating and governance committee is usually responsible for board composition and will work closely with the corporate secretary who maintains board member data including: when the board member joined, any class or term, committee membership, age, any diversity characteristics, particular skills and any other relevant information, based on the organization. In some cases board members are appointed by elected or appointed officials or labor unions or church leaders, which is also noted. This data is regularly provided to the nominating and governance committee and at least annually the committee considers the information as part of its overall review of the board composition. This is considered a corporate governance best practice.
Board Refreshment
Board refreshment is another aspect of board succession planning. Investors express concern about long-tenured directors fearing they have lost their independence. Board policies may have an age or term limit to ensure regular refreshment of the board, but they can be fairly blunt instruments. The more thoughtful approach to board refreshment is a combination of a current skills assessment and board evaluation to focus on the board’s and organization’s needs based on its current strategy. The value lies in having a robust process that results in an effective board with the right set of skills and experience.
Board refreshment is another aspect of board succession planning. Investors express concern about long-tenured directors fearing they have lost their independence. Board policies may have an age or term limit to ensure regular refreshment of the board, but they can be fairly blunt instruments. The more thoughtful approach to board refreshment is a combination of a current skills assessment and board evaluation to focus on the board’s and organization’s needs based on its current strategy. The value lies in having a robust process that results in an effective board with the right set of skills and experience.
Skills Assessment
Another aspect of board succession planning is for the board to have a regular discussion of what types of skills and experience the board is going to need based on the current strategic plan along with an assessment of the skills and competencies of the current board, noting any gaps. What often follows is a discussion at the nominating and governance committee, as part of the board succession planning, of the findings and recommendations to the full board about how to address either ongoing or upcoming needs of the board.
Another aspect of board succession planning is for the board to have a regular discussion of what types of skills and experience the board is going to need based on the current strategic plan along with an assessment of the skills and competencies of the current board, noting any gaps. What often follows is a discussion at the nominating and governance committee, as part of the board succession planning, of the findings and recommendations to the full board about how to address either ongoing or upcoming needs of the board.
Board Evaluation
Beyond a review of overall board effectiveness, the board evaluation can at times be an integral part of board succession planning, particularly if it includes individual director evaluations. If the results of the review confirm that a board member is not performing, or uncover an upcoming retirement, a conversation can begin about board refreshment and succession planning.
Beyond a review of overall board effectiveness, the board evaluation can at times be an integral part of board succession planning, particularly if it includes individual director evaluations. If the results of the review confirm that a board member is not performing, or uncover an upcoming retirement, a conversation can begin about board refreshment and succession planning.
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