Corporate Secretary’s new report:”Succession planning: Preparations for the inevitable” reveals the results of an online survey of corporate secretaries, assistant corporate secretaries, GCs, deputy GCs, and other governance professionals, at companies worldwide (58% North America), conducted between December 2021 and February 2022. Respondents reflected small-, mid-, large-, and mega-cap companies.
North America-specific responses include:
- Succession planning responsibility - The full board most commonly retains primary responsibility for succession planning (31%), followed by the nominating and governance committee (27%), and then the compensation committee (23%). In addition, 43% of companies say the NEOs provide input, and 39% of companies say senior management provides input, on the company’s succession planning, while 23% of companies look to outside advisors.
- Plan scope - The vast majority of succession plans cover the CEO and commonly address other NEOs and senior management. Nearly half cover board members.
- Board succession - Board succession plans most often include skills requirements (84%) and DE&I considerations (71%).
- Frequency of review - Most boards review their succession plans annually.
- Investor interest - A majority of respondents indicated that their investors have never asked questions about the company’s succession plans.
Most of the data is also benchmarked by company size on a global basis. With the exception of which committee or whether the board has primary succession planning responsibility, practices across company sizes are generally consistent. Mega-cap and large-cap companies are much more likely to task the nominating and governance committee rather than the full board with primary responsibility for succession planning.
See Corporate Secretary’s release and additional resources on our CEO Succession and Board Recruitment & Succession/Refreshment pages.
This post first appeared in the weekly Society Alert!