Board succession planning — why every company needs a proactive strategy

Having the right executives on your board is essential for sustained corporate success. However, nothing lasts forever, and all too often, companies find themselves unprepared when board members retire or move on. 

This is where board succession planning comes in. Boards need to proactively anticipate changes in their composition and prepare a clear strategy to manage transitions, maintain stability, and remain focussed on long-term goals. 

In this article, we explore what board succession planning is, and provide practical steps that your board can take to ensure continuity, efficiency, and preparation for the future. 

What is board succession planning?

Board succession planning is the process of identifying and preparing future executives who will join the board. It involves ensuring that the right mix of skills, experience, and perspectives are always present to guide the organisation towards success. 

Rather than waiting until a position needs filling, board succession planning proactively develops a pipeline of potential candidates, ensuring that new board members are ready to step into their roles with confidence and alignment with the company’s strategy.

Why is proactive succession planning important?

Succession planning isn’t a ‘nice-to-have’ — and when it’s neglected, companies risk significant gaps in oversight, operational inefficiencies, and the potential loss of stakeholder and shareholder confidence. Without a board succession plan in place, organisations often struggle to find suitable replacements when board members depart, leading to instability, and in the worst cases, suboptimal recruitment.

By contrast, with a structured board succession plan in place, companies build resilience. Proactive succession ensures continuity in governance, allowing organisations to respond swiftly to unexpected departures or shifts in the business environment. A well-defined process fosters a culture of preparedness and development, where potential executives understand their path forward. 

As Simon Dealy, a Finance & Strategy Executive, explains, “Cultivate a culture where experimentation is encouraged, and failures are viewed as opportunities to learn and grow.” 

What are the challenges of board succession planning?

Board succession planning isn’t without its hurdles. When it comes to managing transitions, boards face challenges such as deciding between internal or external candidates, maintaining stability while fostering innovation, and ensuring a fair, transparent process.

Let’s consider each of these challenges individually: 

Internal vs. external appointments

Choosing between internal candidates, who bring a deep level of familiarity and understanding of the company, and external ones, who  bring with them new ideas, knowledge, and perspectives, is a delicate balancing act. 

While Internal candidates know the business well, they may also suffer from a limited view. External candidates, on the other hand, offer new ideas but may require ramp-up time  and may struggle to adapt. Striking the right balance between internal and external appointments  is essential for a well-rounded board.

Balancing stability with innovation

Succession planning also requires balancing continuity with innovation. Boards need executives who can build on existing strengths while driving progress. Selecting candidates with both qualities helps keep your company rooted in its mission and ready to adapt to future challenges.

The need for transparency and impartiality in the process

Another core challenge of succession planning is the need for impartiality and transparency. The succession process must be transparent and decisions impartial. This demands clear criteria and open communication in order to build trust among stakeholders and board members alike. When decisions are made with transparency and fairness, organisations create a strong foundation for future executives.

What are the key elements of an effective board succession plan?

A well-rounded succession plan ensures that future executives are prepared, aligned with the organisation’s goals, and able to step into their roles and deliver insight and oversight from day one. This requires careful planning, clear criteria, and careful management.

Identifying future needs and competencies 

An important first step in creating a board succession plan is defining the specific skills and competencies that your board requires — and that future board members will need to possess. This process involves assessing the current board’s strengths and identifying any gaps that could hinder long-term goals. By anticipating future needs — such as digital expertise, industry knowledge, or global experience — organisations can ensure their board is well-equipped to guide the company forward. 

Once you have these elements clear, you can create an ideal candidate profile which should underpin the entire board succession planning framework that you operate on. 

Ensuring a diverse and dynamic executive pipeline

An effective board succession plan actively cultivates a diverse pool of candidates. This doesn’t just mean diversity in background, but also in perspectives and skillsets. While some jurisdictions have minimum quotas in place to ensure diversity, boards should go beyond this — and think more deeply — when considering diversity in future board members. 

Building a dynamic pipeline allows boards to bring fresh ideas to the table while representing the communities they serve. A diverse board encourages innovative thinking and helps tackle complex challenges with a broader range of insights, and therefore should be more than a box-ticking exercise.

Creating a robust evaluation and feedback mechanism

Regular evaluation and feedback are essential to a strong succession plan. Setting up clear criteria and conducting periodic assessments allows boards to track potential executives’ progress and readiness. Constructive feedback helps candidates develop their skills over time, creating a seamless transition when the need arises.

Saim Asci, Vice-Chairman of the Board and CEO of MotorAsin emphasises the need for deliberate coaching and development, commenting, “In addition to identifying high-potential board members, invest in their development through targeted training, mentorship, and leadership opportunities. Encourage them to participate in external board governance programs, industry conferences, or networking events to broaden their perspectives and enhance their skills.”

Legal and regulatory considerations

Succession planning must also account for legal and regulatory requirements, which vary across industries and jurisdictions. Ensuring compliance helps avoid potential risks, reinforces the board’s legitimacy, and builds trust with stakeholders. A good plan considers these factors at every stage, from identifying candidates to formalising appointments.

How can technology support board succession planning?

Technology is revolutionising board succession planning, making it more efficient, transparent, and data-driven. With the right tools, boards can track performance, streamline feedback and maintain a clear record of potential candidates — all contributing to a robust and future-ready board succession plan.

Here are some of the ways technology can support your board succession planning process: 

Assessing executive performance 

Digital platforms can store and analyse data on board members and candidates, tracking everything from performance to specific skills and experience. 

This helps boards identify gaps in expertise and focus on the development of key competencies. By keeping a digital record of the succession pipeline, boards can ensure they’re always aware of the talent available and ready for future changes.

Streamlining evaluation and data analysis

Technology simplifies the process of evaluating board performance , allowing boards to review performance data, gather feedback, and assess competencies with ease. 

Automated tools can highlight patterns and trends, offering valuable insights into each candidate’s strengths and areas for growth. This data-driven approach enables boards to make informed decisions and develop a talent pipeline aligned with the company’s strategic goals. This can also feed into the candidate profiles for future board members. 

Providing solid foundations for board member transitions 

Board management software — like Sherpany — enhances succession planning by providing solid foundations for boards to operate on. By centralising documentation, enabling secure collaboration, and providing transparency, Sherpany helps future-proof your board of directors and removes single points of failure and process inefficiencies. 

With a clear record of past meetings, decisions, and searchable documentation, Sherpany provides all board members — whether new or not — with the tools and processes to hold more collaborative and productive board meetings.

Building a future-ready board: Succession planning as a continuous process

A successful board succession plan is not a one-time task; it’s an ongoing process that evolves with the organisation’s needs. By continually assessing and adapting the succession strategy, boards can remain agile and prepared for whatever the future holds.

Corporate priorities, market conditions, and strategic goals change over time — and so do the skills needed on the board. Succession planning must keep up with these changes. As Jennifer Roebuck, CMO, CEO and NED, says, “The board should review each other and the chair each year. 3-6 years on a board is a healthy tenure. The Chair should be shaping the board composition and culture. Good succession planning happens annually — like full time executive teams, boards benefit from new perspectives.”

An effective succession plan therefore needs to align closely with the organisation’s broader strategy. This means developing a board that not only understands the company’s vision but also has the skills to drive it forward. By integrating succession planning with strategic goals, boards can ensure that board member transitions support the company’s long-term objectives.

As technology and market dynamics evolve, boards must be ready to adapt. Regular evaluation and technology-enabled insights allow boards to anticipate future needs, respond to emerging challenges, and adjust the succession plan as needed. This proactive approach creates a board that’s not just prepared for the future, but capable of shaping it.

Secure long-term success through strong board succession planning today

Robust board succession planning does more than prepare for executives’ coming and going. It strengthens corporate governance, embedding accountability, transparency, and forward-thought into every decision. This ongoing approach to succession planning ensures that boards not only respond to today’s demands but are also equipped for future challenges.

Sherpany plays a crucial role in supporting this process, offering a comprehensive board management solution that facilitates effective collaboration, healthy board meeting processes, and secure document sharing. By centralising the entire meeting process, Sherpany paves the way for effective board succession planning, ensuring that every aspect of board meetings are well-documented and accessible for incoming board members. 

If you’re ready to secure a new chapter for your board, book a free consultation  and find out how Sherpany can help.