There is more interest than action in CEO succession planning

Source Article: PRNewswire

Korn/Ferry survey reveals more interest than action in CEO succession planning among top companies.

A recent Korn/Ferry Executive survey indicates that the majority of global companies do not have a CEO succession plan in place, even though they regard CEO succession as an important element of overall corporate governance. The Korn/Ferry Institute surveyed a global sample of corporate leaders.  (The institute commissions and publishes research utilizing Korn/Ferry’s expertise in executive recruitment and talent development.)

According to the survey, nearly all companies – 98 percent – regard CEO succession planning as an important piece of the overall corporate governance process. Yet, only 35 percent of respondents are prepared for either the unexpected or planned departure of their CEO.

Despite the recent increase of unexpected departures of several high-profile CEOs, the trend has not fully opened the eyes of corporate executives. The survey reveals that 43 percent of respondents have not increased their attention to succession planning in response to recent scrutiny and headlines focused on hasty CEO departures. Nearly half of respondents, 49 percent, have not put a succession plan in place in the last three years.

“Given the number of abrupt, high-profile executive departures this year {2010}, it’s surprising that more companies are not acting with greater urgency to put a CEO succession plan in place,” said Joe Griesedieck, vice chairman and managing director of Korn/Ferry Board and CEO Services Practice. “In today’s environment, succession planning should be part of any company’s standard approach to governance.”

Recent changes in federal regulation concerning CEO succession disclosure rules have changed the outlook of organizations considering the importance of CEO succession planning. Of those surveyed, 48 percent reveal that CEO succession planning is more important now than in the past, while 51 percent have not changed their attitude toward CEO succession and believe it has always been important.

Do you regard CEO succession planning as an important piece of overall corporate governance?
Yes        98%
No          2%

Does your company have a CEO succession plan in place?
Yes        35%
No        65%

Has your company put a succession plan in place in the last three years?
Yes        39%
No        13%  We had a succession plan in place earlier than three years ago.
No        49%

Is CEO succession planning more important now than in the past?
Yes, it is more important.            48%
No, it has always been important.        51%
No, it is not important.              1%

Have the unexpected departures of several recent high-profile CEOs heightened attention at your company on CEO succession planning?
Yes                        23%
No, it has always been a priority.        34%
No                        43%

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