succession planning...succession planning the board’s most important task!denmark: last 10 years...

SUCCESSION PLANNINGSame task but different approach

Publicly owned company

• FL Smidth (DK)

• Select Service Partner (UK)

• Air Canada (CA)

• Royal Caribbean Cruises (USA)

PE owned company

• Flying Tiger (DK)

• Tia Technologies (DK)

• Nordic Aviation Capital (DK)

• VFS (CH)

• Unilode (CH)

Family owned company

• CP Dyvig (DK)

• Braganza (SE)

SUCCESSION PLANNING The Board’s most important task!

Denmark:

Last 10 years in Denmark’s 52 largest companies:

83%of the companieshave changed CEO

57CEO changes

65%thereof EXTERNAL

32%thereof NON-DANES

Source: Korn Ferry

SUCCESSION PLANNING The Board’s most important task!

USA:Significantly higher proportion internal recruitments (75-80%)

Better, more formalized succession

planning process ?

20142/3 had no formalized process

201750% had a formalized process (due to changed SEC guidelines)

Source: The Conference Board

DOES EXTERNAL CEO RECRUITMENT INDICATE POOR SUCESSION PLANNING?

Generally, YES!

• Fresh pair of eyes

• New skillset desired

• The external benchmark better

• Sends negative signals internally

• Creates uncertainty

• Loss of momentum/Learning curve

• Increased risk of “non-fit”

BUT …

Identity & Assess

InternalCandidates

Identify & EnsureSmooth

Transition

CEO SUCCESSION

CEO Succesion is not an

event. It is an ongoing

process for developing

your talent pipeline.

”

Source: Korn Ferry

EVERYTHING STARTS WITH TALENT MANAGEMENT

APPLICATION DEPENDENT ON

Geography (Governance model)

Size of Company

Ownership structure

PLANNING AND EXECUTIONTwo different things

Profile can change

Key persons quit

The timing changes(performance, illness etc.)

THREE EXAMPLES

Internal candidate External candidate ?

BOARD SUCCESSION PLANNING

A different discipline which also requires careful planning and continuous focus

• The chairman’s task• The role of the Nomination Committee • Diversity• Board dynamics• Governance model• Recruiting to committees