While succession plans are essential to successful change at the top, a well-planned transition, with clearly defined roles for key stakeholders (particularly board members), can serve as the springboard for accelerating strategic alignment between the CEO and board and help to maintain and even build business momentum.
In fact, board involvement and support can make a critical difference, according to RHR International’s study on the subject, Chief Executive Transitions: Keys to an Effective Transfer of Leadership at the Top. Although many board members believe they currently provide sufficient support to the new CEO, a majority of newly appointed CEOs were disappointed with their board’s contribution to their transition.
Of internal hires, 43% felt their board was “involved”, while just 17% of externally hired CEOs felt the same.
Generally, boards support CEO transitions in four ways:
1. By being open and accessible
2. By designating a board liaison to provide support
3. The lead director plays an active role
4. There is often predecessor overlap with the incoming CEO
However, 61% of CEO respondents said their expectations for how their board would support their transition and help them get acclimated to the post were different than what they received. In short, the CEOs expressed a desire for more guidance from their boards than they got.
For example, frequent feedback was a common expectation, as well as more proactive and forthright communication about expectations and strategic priorities. “I wanted clarity of the board’s expectations, which they were hesitant to express,” one CEO said.
In the RHR International study, CEOs and board members will find information to help work through the transformation, including:
• Advice for boards
• Advice for CEOs
• Three changes that are critical to success
• Recommendations for the outgoing CEO
• The board’s role in a well-planned transition
• What CEOs can expect from a well-planned transition
The CEO transition process is, above all else, an organizational event, composed of the interplay of individual (CEO), senior team and organizational dimensions. All three areas must be addressed in an integrated, holistic manner for the transition to be successful.
Find more information here.
This content is sponsored by RHR International.