A succession plan for a board of directors is a rather important strategic document. It solves a complex but delicate problem of how to replace a departing board member with minimal risk to the company.
How thoughtful you are in drafting a succession plan will determine how well it works. Here are some techniques and best practices for better board succession planning that will make the task of drafting a succession plan much easier.
Corporate best practices for developing a succession plan
We would like to highlight that the process of developing a succession plan as well as its contents may vary significantly from company to company. Corporate records policies and board succession procedures will also play a role. Nevertheless, there are basic practices that can be applied in all companies to facilitate the succession plan process.
The most popular practices in the business world for developing a succession plan for the board of directors are as follows:
- Make the development of a board succession plan part of an ongoing corporate practice. Meaning that work on such an important strategic document should not be done on an ad hoc basis. It needs to be a constant focus – changing outdated or irrelevant activities and procedures, making changes as needed, and continually checking to ensure that it is aligned with the corporate culture. This will help integrate the board succession plan seamlessly into the company’s overall document management system.
- Make the work on the succession plan public. To do this, it is advisable to make a draft of the future document visible to the entire board of directors using the tools on the dashboard of the virtual whiteboard. In this way, each board member can review the draft, make comments or corrections, and have a discussion. The sooner the draft succession plan is reviewed by management, the sooner it will be approved and integrated into the company-wide documentation system.
- Put the succession plan discussion on the agenda. Once the succession plan options have been discussed, the finalised succession plan should be brought to the board for approval as soon as possible. Without this, it will not be possible to use the plan. It is worth bearing in mind that succession plan discussions should not be fleeting – they need to be the first item on the board’s work plan.
Improving procedures for running the company is a continuous job that requires attention to detail. But if you use practices from other companies, you can create an effective tool for dealing with problematic situations.
How can a board succession plan help the company?
If you have heard of a succession plan before but are not sure how it can help your company, we suggest you learn more about its importance in the process of administering the company:
- reduce the impact of a management crisis on the company’s operations;
- ensure its stability in the marketplace;
- to increase the confidence of business partners and all employees;
- reduce the time and money needed to find a new candidate;
- control the process of replacing a departing board member.
In addition, a succession plan helps make board structures more open and accessible.