Who has a role?
Overall, 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. The nominating and governance committee is the most common choice, cited by almost a third (32 percent) of respondents, followed by the main board (27 percent).
Almost a fifth (17 percent) say their board’s compensation committee is in charge of the issue, while 6 percent say they have a specific succession planning committee. Just 4 percent say they don’t have succession plans – a situation governance professionals would recommend addressing.
Broadly speaking, respondents at larger companies are more likely to say the nominating and governance committee has primary responsibility for succession planning. A quarter of those at small-cap companies and 24 percent of those at mid-cap companies say that this committee is in charge, compared with 38 percent of those at large caps and half of those at mega-cap companies.
Conversely, 42 percent of respondents at small-cap companies say their main board is responsible, compared with 20 percent of those at mega-caps. Just 8 percent of those at small-cap companies say their compensation committee takes charge when it comes to succession planning, while just under a quarter of those at bigger companies (24 percent of large caps and 23 percent of mega-cap) say the same.
More than four in 10 respondents in Europe (45 percent) say the nominating and governance committee has primary responsibility for succession planning, compared with just over a quarter (27 percent) of respondents in North America. Those in North America more frequently (23 percent) say their compensation committee handles the issue than do those in Europe (10 percent).
Among all respondents, more than four in 10 (43 percent) say senior management also provides input on succession planning at the company and 43 percent say NEOs are involved. Twenty-one percent say outside advisers provide input, with those figures broadly consistent between respondents in North America and Europe.
More than half (55 percent) of respondents at mega-cap companies say NEOs give input on succession planning, compared with 49 percent of those at large caps, 41 percent of those at mid-cap companies and 38 percent of those at small caps.
