On succession planning for boards that have not yet had a single change of seat

Boards that have never changed a member do not know how good they are at changing a member. This sounds tautological. It is not. It is a description of a real risk that catches private boards more often than public ones.

The mechanic of succession planning is, on paper, well understood. There should be a rolling nominations committee view of the skills matrix. There should be named potential successors for the chair and each committee chair. The skills matrix should be reviewed at least annually. None of that is novel. What is harder is the practice of running a real recruitment exercise for a non-executive seat when the existing board has been together for a decade and has never had to.

The first practical issue is the candidate experience. A long-tenured board has a working relationship that a new candidate cannot see from the outside. The candidate's first board meeting is a meeting where the existing directors know each other's reflexes. The new director does not. A succession plan that ignores this is a plan that recruits a director and then quietly underuses them for the first year. The fix is small but matters. A pre-board orientation that includes one-on-one conversations with each existing director, before the first meeting, accelerates the integration by months.

The second issue is the question of fit. Long-tenured boards develop habits that look like culture from the inside and like quirks from the outside. The chair who reads the appendices first. The audit committee chair who always asks the question that has not been asked. The non-executive who is famous for the pre-meeting call. These habits are not in the governance charter. They are not transferable by reading the board pack. A succession plan that is honest about them gives the incoming director a better chance. A plan that pretends the board is generic is a plan that recruits to the role description, not the role.

The third issue is the question of what the board does not yet do. Every long-tenured board has a blind spot. The temptation in succession planning is to recruit for the strengths the existing board recognises and rewards. The discipline is to recruit for the strengths the existing board does not have and has not noticed it lacks. This is the part of the conversation that nomination committees most often skip. It is the part most likely to change the trajectory of the board over the next five years.

A practical test I have used is to ask the existing directors, separately, to write a one-paragraph description of the board's current weakness. Not the firm's weakness, which is easier to write. The board's. If three directors write the same paragraph, the succession plan should be aimed at the gap they describe. If three directors write three different paragraphs, the succession plan has a prior step, which is the conversation about what the board is for.

My working rule is that a private board should run a notional succession exercise every two years, even if no seat is open. The exercise is the conversation that produces the plan, not the plan itself. The plan written without the conversation is a document. The conversation produces directors.