Multiyear Board Succession Planning Matrix

Originally appearing in the Report of the NACD Blue Ribbon Commission on Building the Strategic-Asset Board, these board experience matrices are designed to assist nominating and governance committee members plan for board succession.

Committees should consider taking a “clean-sheet approach” to succession planning, based on current and future strategic needs. The necessity of incorporating a forward-looking view into this exercise—the Report of the NACD Blue Ribbon Commission on the Board and Long-Term Value Creation recommends a time horizon of at least three, if not five or more years, when considering board composition—suggests that it would be especially appropriate to include it as an agenda item at the board’s off-site strategy meetings (if not on an annual basis, then at least every two to three years). Nominating and governance committees should ask the following questions:

• Is our skills matrix up to date?

• If we were to create a board from scratch today, what would it look like —from the standpoint of skills as well as leadership styles and personalities?

• What will we need in three, five, or more years? How do our future needs compare with the skills and personal attributes of current board members? Where are the gaps?

In addition to requirements for the board as a whole, the clean-sheet exercise should include committee-specific considerations, such as the availability and readiness of potential successors for current committee chairs and/or plans for committee-chair rotation. The output from this discussion will be a future-oriented outline of what the organization requires from the board, and thus will be different in kind from the current snapshot of director skills that is disclosed in public-company proxy statements. It can be used as a baseline to assess the relevancy of current directors’ skills, identify opportunities for continuing education, and prioritize recruiting needs.