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'Succession' Planning: It's A Very Real Issue

Posted on February 6, 2015 at 3:50 PM

Institutional investors are not the only ones to be concerned about succession planning in the UK's listed companies.

They have certainly made it clear recently - both privately and publicly - that they want to see evidence of 'planning' - not just regulatory announcements regarding 'succession.' So has the UK corporate governance watchdog, the Financial Reporting Council (FRC). Now it seems they are all in good company. 

Business leaders are dissatisfied with their succession management programmes, according to a new global study of executives from Korn Ferry, the leadership and talent consultancy.

Only a third of respondents (36%) says they are satisified or very satisfied with their company's succession management programmes. Less than a quarter (23%) say they have a solid pipeline of “ready now” candidates. Korn Ferry calls this "an alarming rate of dissatisfaction among senior leaders and executives." 

Given what they do - as headhunters - alarmism needs to be put into perspective. 

But the study also reveals that more than three-quarters of executives (78 %) believe their organisation’s succession management programmes only pertain to very senior levels of management.

As a result, says Korn Ferry, "the majority of executives still end up seeking talent externally to fill open leadership positions, even though they feel the ideal mix of developing talent internally compared to hiring it from the outside would be 2:1."

What listed companies really really need is better internal communication. #justsaying 

Categories: Corporate, Behaviour, Governance