Succession planning helps to ensure that if your CEO leaves, you can replace them in an acceptable time frame and with available resources.
It's helpful for your board chair to maintain an informal short-list of credible people who could fill the CEO role on a temporary or permanent basis.
To support this, your board or remuneration committee can:
- have succession risk management as an annual or biannual board meeting agenda item, covering topics like candidates who could do the CEO’s work if they left suddenly and strategies for addressing a lack of candidates
- review if any of your entity’s executive team could be candidates for the CEO role
- work with the CEO to identify ways to develop executive team members who could be CEO candidates
- invite other board directors, the current CEO and CEOs of other entities to suggest potential candidates
- discuss potential candidates with other board directors and stakeholders to seek their views
- consider potential candidates based on the future directions of your entity and demands on the CEO role
- review the shortlist on a regular basis where there are significant changes in the entity and the environment in which it operates.
Transitioning to a new CEO
Your board chair is responsible for helping the new CEO transition into their new role.
At a minimum, the chair should:
- have the new CEO meet the board, either as a group or one on one
- announce who the new CEO is to your entity’s employees and stakeholders.
What to focus on when briefing your new CEO
When your chair, board and executive team brief the new CEO, focus on these areas:
Let them know about your entity’s:
- current activities, the impacts of these activities and key issues
- needs for future activity, what drives this need and key issues.
Source this from your executive team and outgoing CEO.
Entity structure and resourcing
Let them know about your entity’s:
- organisational structure that influences day-to-day operations
- employee and organisational resources.
Outline your entity’s key performance indicators and immediate priorities for the CEO.
Source this information from your chair.
- authority and responsibilities of the chair, board, CEO, minister, and department
- protocols your entity uses to govern these relationships
- relationships with the chair and how this is conducted, such as through regular meetings
- relationship with the board and board meetings.
Source this information from your chair, outgoing CEO, senior employees and other public sector CEOs.
Highlight emerging issues and key players.
Source this information from your chair, outgoing CEO, executive team, senior employees and Minister.
Develop a plan to introduce the new CEO to stakeholders, including the minister (if that didn't occur during recruitment).
Advise them of your entity’s financial health, sources of income and risks to this income.
Source this from your entity’s Chief Financial Officer.
Workforce performance and development
Give them with a profile on your entity’s:
- workforce including skills, age, retention, turnover and internal movement
- workforce capacity to deliver in the future including succession risks and plans to address these risks
- workforce culture.
Source this from your executive team, human resources manager and other employees.
Brief them on recent and current media coverage and issues arising from this.
Source this from your communications and executive teams.
Inform them on how your entity collects and shares information on its performance.
Source this from your executive team.
- remuneration bands for executives
- executive remuneration guidelines.