The CEO's role in succession planning: the level of collaboration between the CEO and board can vary significantly, and several factors can change the dynamics of the process.

• Author: O'kelley, Jack "Rusty", III
• Position: HEIDRICK & STRUGGLES GOVERNANCE LETTER

DESPITE THE BARRELS of ink and numberless bytes that have been expended on CEO succession planning advice, many directors remain dissatisfied with the process. In one of the most comprehensive surveys of board directors to date, more than a third of U.S. directors and more than half of directors outside the U.S. indicated that their boards do not have an effective CEO succession planning process. Conducted by Women-Corporate Directors (WCD), Heidrick & Struggles, Dr. Boris Groysberg of the Harvard Business School, and researcher Deborah Bell, and drawn from a sampling of more than 1,000 directors in 58 countries, the 2012 Board of Directors Survey also found that more than two-thirds of U.S. directors and more than three-fourths of non-U.S. directors say their boards do not discuss the succession planning regularly or do so only annually.

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While the causes of dissatisfaction no doubt vary from board to board, we have found that breakdowns often stem from lack of clarity about the sitting CEO's role in the process and the dynamics that should govern it. In the early stages of the process, the CEO is responsible for the leadership and development of their team, with the board monitoring the infusion and development of talent. As the likely date of succession approaches, the level of direct involvement in the selection process should quickly shift to the board. Boards that understand this dynamic and direct it thoughtfully through the early, middle, and late stages of a planned succession will be able to discharge this important duty far more effectively than if they simply feel their way forward.

It's never too early

While the board ultimately owns the succession planning process, newly appointed CEOs have an opportunity to pleasantly surprise their boards by initiating the succession planning discussion almost as soon as they take office. In fact, we coach new CEOs to introduce the subject no later than their second meeting with the full board. The further out the time horizon for the succession, the more focused the CEO should be on recruiting and developing as many successors as possible. The day to day responsibility for this talent recruitment and development falls to the CEO, but the board should ensure that they are receiving regular talent updates and interacting with the high potential succession candidates to actively monitor the succession process. In one best practice example in a large U.S. company, the...