Public and private companies continue to demonstrate critical lapses in CEO succession planning, according to a study by Stanford University's Rock Center for Corporate Governance and Heidrick & Struggles, a leadership advisory firm, reported in Credit Union Directors Newsletter.
"We found this governance lapse stems primarily from a lack of focus: Boards of directors just aren't spending the time that's required to adequately prepare for succession," says David Larcker from the Stanford Graduate School of Business.
Survey findings include:
* 69% of respondents believe a CEO successor needs to be "ready now" but only 54% actively are grooming an executive for the position.
* Boards on average spend only two hours a year on CEO succession planning.
* Only 50% have a written document detailing the skills required for the next CEO.
* 71% of internal candidates know they're in the formal talent development pool, but only 50% of these internal candidates receive regular communication on the issue.
* Most firms (65%) haven't asked internal candidates whether they want the CEO job or, if offered, whether they’d accept it.
* Once viable candidates are identified, 38% of firms believe an external search should continue at the same pace.
* 48% believe they have an extremely strong or very strong understanding of the capabilities of internal candidates, only 19% have extremely or very well-established external benchmarks to measure their skills against.
* Only 50% of companies provide on-board or transition support for new CEOs.
Not only does absenteeism affect your bottom line, it increases everyone’s workload.