There are a couple of facts about CEO Succession planning that, by now, should be carved on every boardroom table: CEO Succession is an on-going process that is crucial to the well-being of the enterprise, and one for which the full board has ultimate responsibility and accountability. Certainly, most directors are aware of this by now. However, understanding that the board is accountable for succession planning, and knowing how best to follow through on the process are two different things. Even the best directors, are “part timers” at their companies, and with an average of eight meetings a year, they need to have a systematic process to stay on top of key areas of oversight.

Given their limited time and exposure, how can boards make sure they get succession planning right? After all, there is no room for error when selecting a CEO. The answer is increasingly to rely on a proven process that will not only produce the best succession candidates, but also demonstrate that the board is performing its fiduciary duty according to the highest standard set by current best practices.

At Korn Ferry, we believe there are seven steps that are the defining tenets of a “gold standard” CEO succession process:

1. Align the Board on Future CEO Profiles that are Driven by Business Strategy: Engage the board in a strategic alignment process to define short-term and long-term business priorities. Then link these strategic priorities to the competencies, experiences, traits, and drivers required in the next CEO to create a CEO Success Profile to evaluate internal and external CEO candidates.
2. Assess Candidates Against Industry Benchmarks, Valid Indicators of Executive Potential and the CEO Success Profile: Acquire an accurate, unfiltered, multidimensional view of the candidates’ strengths and weaknesses in a mix that includes a) quantitative assessments, b) market interviews, C) behavioral event interviews, d) stakeholder feedback, and e) business simulations. This multidimensional assessment methodology evaluates relevant competencies and experiences as well as beneath-the-surface personal traits and drivers that will align with success.
3. Think Two to Three CEO Moves Ahead, not just about Replacing the Incumbent: Companies should develop a dual focus that includes both preparing capable near- and mid-term leaders, and identifying those deeper down in the organization who possess future leadership potential.
4. “Cross-Train” Generations of CEO Successors with a Mix of On-the-Job Training, Intensive Coaching, Mentoring, and Education: Help future CEOs to blossom with individually tailored development plans geared to both individuals’ needs, and what the organization will require in a future leader.
5. Get to Know the Bench and Its Potential: Future CEOs should gain regular exposure to the board so directors can continue to assess their potential as possible future leaders. Insight into leadership traits and motivations of a leader are as important as an individual’s experiences and proven track record.
6. Maintain CEO Succession as a Standing Board Agenda Item Since It Ensures a Multilayered, Multigenerational Process: CEO Succession is an on-going “evergreen” process that continues, even immediately after the appointment of a new CEO.
7. Ensure that your Talent Management and Development Planning is Linked to your Longer-Business Strategy: During both regular board meetings and at intensive off-sites, many companies now link strategy sessions and talent development sessions to ensure that any shifts in the strategy will inform what is required in future leaders.

Growing and maintaining a high-quality succession and talent management development process represents an investment that will be paid back many times over. It enables companies to continually strengthen the leadership needed to deliver strategic priorities for high performance, while simultaneously developing the next generations of leaders for an ever-changing world. This approach also enables organizations to attract top talent who seek personal development and career growth. Finally, almost nothing is more tightly aligned with protecting shareholder value than meeting this “CEO Succession Gold Standard,” as it assures the probability that the right leaders will be in place to deliver sustainable, profitable results.

Adam C. Bandelli, Ph.D. is the Managing Director of Bandelli & Associates, a boutique consulting firm focusing on leadership development and organizational effectiveness.

For more information about this or other leadership topics, visit our website at www.bandelliandassociates.com.

Leadership Matters. Without It, People Fail.