Giving Compass' Take:
- Prabhir Correa, writing for India Development Review, discusses what key stakeholders are necessary for a seamless leadership transition during succession planning.
- What role can you play in supporting successful transitions?
- Read more about meaningful CEO succession.
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Succession planning in the social sector, or rather the lack of it, is increasingly being discussed in the development sector. In 2017, The Bridgespan Group, in partnership with Omidyar Network surveyed 250 leaders from the social sector in India to look into nonprofits’ efforts to strengthen internal leadership skills and build their leadership bench. Fifty percent of respondents, including founders and leaders of organisations, admitted that they do not have succession plans in place.
However, despite concerns about succession planning in the social sector, in our experience, little is being done to deal with the difficulties inherent in the process. Tasks such as formalising the succession process, developing in-house talent, and involving the board and external stakeholders all require considerable effort, funding, and funder participation.
As a wealth-advisory firm for family businesses, Waterfield (where I work) has been privy to many successful intergenerational and intragenerational transitions in businesses. In our experience, there are lessons and best practices from corporate India that can be tailored to support leadership transitions in the social sector.
In India, the rules and regulations governing corporate bodies are relatively standardised. Regulation in the corporate world permeates down to every aspect of business—including succession planning. For example, The Securities and Exchange Board of India (SEBI) has mandated that a company’s board must have a proper succession plan or policy in place. This is one of the most significant attempts to ensure that investors do not suffer due to sudden or unplanned gaps in leadership. The general objectives of a company’s succession policy include identifying and nominating suitable candidates for the board’s approval, identifying the competencies of key positions and developing those through planned efforts, and identifying key people in senior management roles who might be close to retiring or moving on.
All the key stakeholders play an important role in succession planning:
- The founder
- The funder
- The board
- The organisation
Read the full article about succession planning by Prabhir Correa at India Development Review.