Board succession: Getting it right

With a strong board of directors, a company can impact the present and forge the future. But how does a company get a high-performing board? How does it “grow” board members? How does it handle board member succession? Often, the answers are different for public and private companies. Board candidates for public companies are sourced from outside the organization, many times with the help of recruiting firms. It’s a highly competitive process with many candidates and few openings. These directors come “ready made” and are often former CEOs and financial experts. As a private partnership, Deloitte is different. Our board consists entirely of our current partners. We don’t use recruiting firms or look externally for directors, so a strong governance-focused leadership development and succession process is vital. I’ve observed that many effective public and private boards employ practices similar to ours. They apply them in ways that are tailored to their organizations. It takes time, but the rewards far exceed the investment. One way we identify potential board members is to use a 10-12 person board council. The organization’s nominating committee, management, and board identify candidates by assessing their independent thinking, appetite for tackling tough issues, and willingness to speak up. In consultation with the board and CEO, the chairman selects the candidates. Each candidate attends two board meetings per year as a non-voting observer, sits on a board comm...

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