As boards continue to navigate competitive pressures and emerging digital risks, the people sitting around the board table have never been more important. Yet, many boards continue to approach succession planning in an episodic fashion—addressing the topic only when they need to replace a retiring director. On a spectrum ranging from reactive to strategic, where does your board fall?
In this episode, Paul DeNicola, Principal with PwC’s Governance Insights Center, delves into this critical board process to highlight common roadblocks and best practices. Where do boards usually falter during the succession planning process? What action items does he offer boards looking to better align director succession with long-term strategy?
PwC and Spencer Stuart recently tackled these questions in a joint report, The Road to Strategic Board Succession, which presents various strategies for improving the succession planning process–from leveraging board evaluation results to setting early expectations around director tenure.
[Boards should] take a multi-year view of impending vacancies. That is, not looking at it year by year, but look out two, three, even five years in the future [assessing] what anticipated vacancies you have.
Host TK Kerstetter also asks DeNicola about disclosure surrounding director succession. What are boards required to disclose? What are investors expecting? In the appendix of the report, readers will find a helpful summary that details what major institutional investors (e.g., BlackRock, Vanguard, State Street Global Advisors, and CalPERS) are requesting when it comes to disclosure around director succession.
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