Recruiters: Many Firms Unprepared for Exec Succession
Half of respondents to the most recent Executive Recruiter Index from search firm Korn/Ferry International listed inadequate preparation as the key failing, according to a Korn/Ferry news release. Other succession planning missteps identified by recruiters were no formal evaluation process (27.4%), subjectivity in selecting internal candidates (17.4%), no buy-in from the board of directors (3.5%) and position specifications that are too rigid (2%).
When asked what percentage of organizations have a capable CEO-in-waiting, the majority of recruiters (60.8%) answered “40% or less,” Korn/Ferry said. While responses were fairly consistent from region to region, North American recruiters were slightly more optimistic about organizations’ succession planning efforts than other regions.
“Finding a successor for the CEO role is one of the most important activities an organization and its board have to undertake,” said Joe Griesedieck, vice chairman and managing director of the CEO practice at Korn/Ferry, in the statement. “Corporate scandals and bad-apple CEOs – though clearly the anomaly – have monopolized the media and put ever more scrutiny on today’s corporate leaders. In this environment of transparent leadership and increased regulation, companies are recognizing that succession planning is a never-ending process that begins long in advance of a CEO’s decision to move on, voluntarily or otherwise.”
The survey also looked at who should drive an organization’s succession planning. The most common response was a succession planning committee comprised of the board of directors (42.8%) followed by the board of directors (41.3%) and the incumbent CEO (11.4%). By region, Latin America and Asia/Pacific appear to be the biggest proponents of succession planning committees, with the majority of recruiters in those regions (63.2% and 53.3%, respectively) saying that committees should drive an organization’s succession planning efforts.
The Executive Recruiter Index is based on a quarterly survey of 201 Korn/Ferry International consultants. This survey was conducted online within the Americas, Europe, Asia/Pacific and Middle East & Africa between April 6 and April 22, 2005.