Governance professionals report on their companies’ succession plans’ content and updates, their confidence in those plans and investor interest
One of the most important responsibilities for boards is picking the right leadership for the company and ensuring there are effective processes in place for this to happen, either in a prearranged manner or in the event of some unexpected change.
Boards need to consider a wide variety of factors when designing succession plans, such as who handles the process, whose successions are planned for and how detailed those plans should be. It is also essential that boards don’t create succession plans then leave them to gather dust. The Covid-19 pandemic has been a stark reminder not only of the need for these plans to be in place but also for them to be understood and kept relevant amid ever-evolving situations. Ultimately, succession planning is about both people and the inevitability of change.
In this special report we present findings from a survey conducted among governance professionals such as general counsel and corporate secretaries. Their responses give insight into areas such as who typically is in charge of planning, who is covered by plans, what boards’ succession plans include and how often boards review them. Respondents also report on investors’ interest in succession plans and how confident governance professionals are in those plans.
Key findings
A majority (59 percent) of respondents say that either their nominating and governance committee or the main board has primary responsibility for succession planning at the company.
Eighty percent of respondents say the CEO is covered by their succession plan, followed by other named executive officers (NEOs) (67 percent), senior management (60 percent) and board members (53 percent).
Almost all (96 percent) of respondents at mega-cap companies say their board’s succession plans include diversity, equity and inclusion (DE&I) considerations.
Two thirds of respondents say their board reviews its succession plans once a year, with just 6 percent saying they do so every two years or less frequently.
Overall, around a third (32 percent) of respondents say they are seeing an increase in the frequency with which investors are asking about their company’s succession plans, compared with three years ago.
Half of all respondents say they are very or extremely confident that their board’s succession plans are effective.
Survey demographics This report is based on the findings from an online survey conducted between December 2021 and February 2022.
Total number of respondents: 245
