Directors Need Succession Plans Too

Boards are now taking their responsibility to develop succession plans for CEOs very seriously. But there is another set of succession plans corporate directors need to draw up: their own.

With the pool of ideal board candidates shrinking, adding a new member to the board or replacing an individual who has decided not to stand for re-election can take much longer than it has in the past.

Board candidates also need to be intimately familiar from the get-go with a company’s business and the issues that it is facing. Having candidates that are waiting in the wings can help this process and give future board members more time to get up to speed on the company. The increasing use of term limits and age limits also heighten the need for solid board succession plans.

For these reasons, many boards are now looking out two-to-three years and planning for any changes that might occur in its ranks. Having a plan in place will mean that the board does not have to scramble to find a fit that will supply the board with the proper set of skills and attributes that it needs to continue to operate with a well-balanced perspective and a diverse set of abilities.

The loss of a key board member, especially the lead director or non-executive chairman, for whatever reason can be incredibly disruptive to a company. Having a succession plan in place will assure a smooth transition and allow the board to remain focused on the oversight of the company.