Succession Planning is the Board’s Blind Spot, says Roopa Kudva

SUCCESSION PLANNING is often seen as an HR responsibility or something to be dealt with when the current leader is about to retire or move on. But this view is short-sighted and risky. In truth, succession planning is one of the most strategic responsibilities a board holds. Done well, it ensures continuity, sustains performance, and builds organisational resilience. Neglected, it can lead to confusion, internal power struggles, or even business disruption. Proactive, systematic, and transparent succession planning is the hallmark of strong governance. Why succession must be a board priority Most boards would agree in principle that succession is important. Yet in practice, it is often postponed, handled reactively, or delegated without sufficient oversight. One reason is discomfort. Discussing succession can feel like questioning the current CEO’s tenure. Another reason is the urgency of compliance, operational reviews, and quarterly performance discussions, which often crowd out long-term planning. Leadership transition is not an episodic but an ongoing process with the same strategic importance as capital allocation or risk management. Few decisions influence a firm’s trajectory as much as the choice of its next leader. Start with talent reviews, not just replacement plans Succession planning goes beyond the CEO and includes building a pipeline of leaders who are ready to step up when needed. This starts with comprehensive annual talent reviews. Boards should regularly assess the top team, their strengths and gaps, and institute development plans. This includes exposure to cross-functional roles, coaching, stretch assignments, and performance feedback. A strong review process does not just ask, ‘Who is ready now?’ but also ‘Who could be ready in two or three years, and what do they need to get there?’ Linking these reviews to the company’s broader strategy ensures that leadership development is aligned with future needs — digital capabilities, global exposure, or the ability to lead transformation. Succession in promoter- and founder-led companies Succession challenges become more complex in promoter- or founder-led firms. Here legacy, emotions, and family expectations are often intertwined with business needs. The first step is open conversation. Boards must engage with the promoter or founder to understand their intent. Is there a family successor in mind? Are they willing to consider a professional CEO? What is the timeline? Avoiding these questions leads to ambiguity and uncertainty. Boards can play a vital role by offering objective guidance, drawing from other companies’ experiences, and keeping the company’s long-term health front and centre. There is no one right answer, but the decision must be deliberate. Bringing in a professional CEO can be transformative, especially when the founder recognises the need for different capabilities. But this transition requires humility, planning, and often coaching, both for the founder and the incoming leader. When timed and supported well, such changes can unlock new phases of growth. What about the rest of the top team? CEO succession often grabs attention. But other critical roles — CFO, COO, chief risk officer, or business heads — are equally key in strategy execution and cultural tone. Boards must have visibility into succession plans for these roles, too. Some boards ask for ‘ready now’, ‘ready in one or two years’, and ‘ready in three to five years’ successor lists, supported by specific development plans. This creates clarity and momentum. Avoiding the ‘crisis succession’ trap Too often, boards are forced into action: the CEO resigns unexpectedly, or a performance issue demands change. This is when the lack of a plan becomes painfully evident. Emergency succession planning is a key component of a robust approach. Who steps in if the CEO is suddenly unavailable? Is there a clear interim plan? Have stakeholders been informed about the process? These questions must be answered well in advance. Equally important is testing the plan. Some boards conduct mock scenarios — say, a simulated CEO exit — to evaluate preparedness. This is especially useful in regulated industries, where approvals and stakeholder communications can add layers of complexity. How boards can lead the process While HR may own the mechanics of succession planning, the board must lead the process. This includes: • Ensuring succession planning is a regular board topic, not just an annual formality. • Tracking how succession candidates are being supported and exposed to challenges. • Asking tough questions about readiness, diversity, and alignment with strategy. • Occasionally meeting top leaders to understand the depth and diversity of the pipeline. The Chair and the Nomination and Remuneration Committee (NRC) play an especially critical role. They must create a safe space for honest conversations, work closely with the CEO, and steer the process with clarity and empathy. Planning for the future, today Succession planning is a necessity. It is not just about the next CEO, but about leadership continuity across the organisation. Boards that do this well take charge of shaping the future. And in doing so, they elevate governance from oversight to stewardship. (The writer, a former head of Crisil and Omidyar Network India, is the author of the forthcoming book ‘Leadership Beyond the Playbook’. Views are personal.) Fortune India is now on WhatsApp! Get the latest updates from the world of business and economy delivered straight to your phone. Subscribe now.

Succession Planning is the Board’s Blind Spot, says Roopa Kudva

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