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7 January 2010 by Brent Cameron
Succession planning has the potential to be one of the major business issues of the coming decade. The demographic reality is that organizations will have a shrinking pool of labour from which to draw on, which will impact operations at all levels, from the receptionist to the CEO. It is this reality that has pushed succession planning – an important issue in normal times – to the forefront.
Given the demographic data, it is not surprising that this issue has already garnered a significant amount of press and even research attention. Despite this attention, study after study shows that CEOs and Boards are not spending the necessary time or effort on succession planning. For a Board of Directors, the importance of CEO succession planning is clear and acknowledged; however, these studies indicate that it continues to be an area that is not receiving adequate attention. This problem has been exacerbated in recent years with high profile accounting scandals that have resulted in new regulations and requirements, which take up significant amounts of Board time.
At Odgers Berndtson, we see the importance of succession planning on a daily basis. The question of how organizations can best implement an effective succession planning program, however, remains far less straightforward. As knowledge around the issue grows, best practices emerge regarding the characteristics of an effective succession planning program. Of particular interest are five specific characteristics that both CEOs and Boards may find helpful in developing a successful and effective program.