Succession planning for C-suite and board positions is not just a checkbox on an organizational to-do list; it’s a strategic imperative that can determine a company’s future success or failure. When done correctly, it ensures a smooth transition of leadership, maintains organizational stability, and preserves the company’s culture and strategic direction. When done poorly (or not at all) it becomes a reactive and chaotic exercise resulting in far-reaching consequences for the organization.

Part 2

In Part 1 we noted the distinction between a Strategy and a Plan and provided some backdrop for the development of a Strategy.  We noted that there is a necessary exercise to know the company- why does it exist, what does it really do, what are the opportunities (and the risks) that surround the business, and no less important, what are the risks to the Strategy?

Here, we will now ask the existential question, “what will the company be when it grows up?” and lay out some of the actions that can help answer that question.  Reminding ourselves that the Board has a duty to make certain the company has a Strategy, Management has the responsibility of developing the Strategy and ensuring the Board agrees with and will support the Strategy.  Management, then, has the further responsibility of developing the Plan to implement the Strategy, and the Board has the oversight role to consider if the Plan is feasible, supportable, and acceptable within known constraints and will deliver on the Strategy- reaching the waypoints earlier described.  Management has the enduring responsibility of making that test before the Board does, and to develop and implement any corrective actions needed to maintain the trajectory of the Plan.

Understanding governance and its relationship to family business legacy is critical for family and non-family board members and advisors.

"Renoirs in our Attics”- Implications for Intellectual Property in the Corporate World

Why Have a Strategy?

We all are familiar with the old adage of Boards being “noses in, fingers out” and can appreciate that the primarily responsibility of a Board is to NOT run the company.  Far too many boards blur the line between management and oversight.  Here, we present the concept that It is critical to differentiate between strategy and strategy implementation.  Rather, the Board is responsible for ensuring an appropriate strategy and to ensure the executive team is running the company correctly and following the path outlined in the strategy.  Moreover, there is the enduring obligation to represent and protect the interests of shareholders - we know this as a fiduciary responsibility.

We also know that the Board has a responsibility to ensure that governance is discharged effectively.  One element of the governance spectrum of duties is to oversee the development and execution of a strategy for the enterprise.  Depending upon the company, Board composition and industry, the development of Strategy can often be delegated to a Board committee or a hybrid model that includes corporate membership.  There is not clear agreement about who makes the strategic choices that will shape the trajectory of the company.  To clarify, the “noses in, fingers out” doctrine suggest that the Board is not responsible for the development of the implementation plan.  They are, however, responsible to ensure one is developed, and then to evaluate the progress of the enterprise against that plan within the context of the strategy.