Board leadership through transformation

Yeah, no, it, it was really great to have an opportunity to speak with Lindsay Frost.

She and I have spoken before.

She's the, uh, reporter at Agenda who wrote the article.

And, um, you know, she was really interested to have a conversation about CEO and C-suite succession planning because there was this interesting report that came out from Pearl Meyer that, um, seemed to indicate that boards are feeling a little bit uncertain about whether or not they've got the talent they need for the future, not just in the CEO chair, but across the entire C-suite.

So we had a, we had a really good conversation about that.

Yeah.

Uh, according to that research, 37% of C-suite executives versus 64% of directors say the board is involved in monitoring the development of CEO succession candidates.

That, to me, is a big perception gap in terms of involvement.

But what I also found, I don't know, funny, but, uh, interesting, another interesting disconnect [laughs] was 100% of directors surveyed versus only 51% of executives say the board reviews succession plans for-

[laughs]

... roles beyond the CEO at least annually.

[laughs]

So that's really interesting, isn't it? So I, you know, that perception gap is, is really fascinating.

Um, you know, Lindsay really wanted to know my opinion about that, and I, and I said, "Look, you know, it's very possible that the board has some of these conversations without anyone from the C-suite in the room."

Yeah.

I mean, there is executive sessions of board meetings for this reason, right? So that we can have conversations about HR-related issues, most often about the C-suite, and we don't have to worry about having someone from the C-suite in the room to dampen the conversation.

So it is very possible that they are, in fact, having these conversations without the CEO's knowledge.

And, and I know that can be really, you know, challenging because the CEO sometimes is also the board chair.

But you can have executive s- sessions without the CEO in the room, and have the lead independent director step in as the chair of that session and have good conversations about it.

I also think, though, part of the perception gap isn't just that the C-suite's not involved.

I think it's also that, you know, nom gov chairs and board members generally all understand that it is very much part of their job to make sure that the organization has the leadership it needs to be successful, and they're all thinking about it a lot.

I mean, we, we heard this in our What Directors Think report this year and in some of the other work that we've done, that thinking about the leadership for the future is, is weighing heavily on the minds of boards right now.

Not least of which, because there was such a big exodus of CEO talent last year from many public companies, but also because it's the AI era.

And they're all thinking about, "Hey, we're making these big bets in AI, and if we don't have anybody in the C-suite who is deep in AI, are, are we really in a good position to succeed with this strategy? Do we have the talent we need to pull it off?" So I think boards are really weighing and wrestling with that question, which from their perspective probably leads to a lot of conversations around succession planning.

Whether or not that's acknowledged by the CEO is a different question.