Any board member is well aware of the value brought to the table by their corporate secretary. It takes a rare kind of person with a versatile, finely-tuned skill set to handle the always-in-flux moving parts of the role.
Included in that list of attributes are highly sought-after traits such as being immaculately organized, a prompt problem solver, and a savvy, critical thinker. Plus, there’s the need to stretch a lot into a little, meaning creativity and resourcefulness are a must for the position.
Beyond that, a corporate secretary must be an exemplary communicator. And they must grasp an array of intricate legal scenarios that help keep boards – well – above board.
So, what then happens when these fantastic employees end up having to leave an organization?
According to SHRM’s survey of 2,366 HR professionals, three-quarters of companies struggle to find members with general business expertise and specific experiences, like corporate secretaries. Also, 47% found it more difficult compared to the previous year.
But if they just had utilized succession planning and board refreshment, their new corporate secretary would have already been prepared to fill the coveted spot. Although 77% of boards confirm that succession planning is the most successful mechanism for effective board composition, only 33% have such a plan.
Delving into succession planning
A board succession plan is a strategic document that ensures the seamless transition of current board members over time while maintaining the continuity and success of the organization.
In general, succession planning in corporate governance can be a crucial facet when grooming internal talent in more subordinate positions for future board membership.
It’s a motivational practice that keeps those younger talents focused on the big picture. In fact, 94% of employers who were surveyed claimed the implementation of succession planning provides a boost to their employees’ overall engagement levels.
Most importantly, it ensures the high-performing individuals on those succession plans are aptly prepared for when it’s time to move into a more prestigious role.
Benefits of board of directors succession planning
Here are the following benefits of a robust board succession plan for the company and the directors.
Leadership transition and business growth alignment
Jane Stevenson, Korn Ferry’s Vice Chairman of the firm’s Board & CEO Services practice, says board talent and strategy alignment is the second most critical challenge to today’s boards. The board’s expertise struggles to keep up with rapidly evolving business trends.
A successful board succession planning policy can mitigate these recruitment challenges and ensure the sustainability of the organization since it:
- Aligns the board secretary’s experience needs with business trends.
- Maps the best candidates based on the company’s long-term strategy and market conditions.
- Ensures seamless leadership transition and timely response to digitalization, ESG, and other governance challenges.
Reasonable board turnover
A comprehensive board succession plan contributes to a successful board turnover:
- Mitigates spontaneous secretary role transitions.
- Minimizes the negative impact of unexpected role transitions.
- Calibrates turnover practices to maximize shareholder value and organizational performance.
Higher board diversity
NASDAQ’s board diversity rules require boards to onboard more diverse members, including women and individuals from underrepresented communities.
Still, diversity implementation will take time. Thus, Deloitte expects women board members to take parity with men only in 2045.
However, a reliable and effective board succession plan helps increase board diversity much faster and much more efficiently because it:
- Prioritizes diversity in the board succession agenda.
- Aligns diversity needs with business performance and strategic growth.
- Ensures proactive efforts for recruiting qualified director candidates from underrepresented communities.
- Addresses aging workforce and Gen Z talent issues.
Higher shareholder trust
Boards traditionally fall short in ESG, digital transformation, and other crucial topics that shape today’s organization’s success. For instance, Harvard Business Review emphasizes that average firms lose up to 50% of digital opportunities.
As a result, shareholders pay significant attention to board composition and succession planning to ensure companies do their best for business growth. A robust succession planning strategy helps boards gain shareholder trust as it:
- Demonstrates the company’s long-term success vision.
- Ensures leadership continuity.
- Aligns board member skills with shareholder expectations.
Pro tip: Check this comprehensive ESG compliance guide to establish better relationships with ESG-oriented shareholders.
Board of directors succession planning process
We have gathered the best industry practices to formulate reliable and actionable board of directors succession planning steps.
Step 1. Establish a nominating and governance committee
A nominating and governance committee is a group of board members that oversee the board succession planning process and individual leadership transitions.
This committee reviews board member roles, recruits new members, develops succession plans, and ensures leadership continuity. Here is the list of activities that fall under the nominating committee’s responsibility when developing a secretary succession plan:
- Evaluating the board’s current capabilities and addressing board refreshments.
- Identifying the key roles and responsibilities of the future secretary.
- Evaluating the secretary’s competence and efficiency.
- Developing leadership transition timelines.
- Recruiting and maintaining effective leadership.
Step 2. Evaluate the director’s departure impact
Develop scenarios for planned and unexpected secretary departures. Address the following succession planning questions:
- How long can your organization function without a corporate secretary?
- Who can take on the secretary’s responsibilities in case of an unexpected departure?
- How does the secretary’s absence affect your organization’s ESG plan?
Step 3. Search for new talents
Take a systemic approach to the board recruitment process and start as early as possible — preferably a year in advance. Note that it can take up to 120 days to recruit new board members.
- Develop a secretary candidate profile based on desired skills, experiences, backgrounds, diversity requirements, and other criteria.
- Organize a conference dedicated to internal and external candidates for the role.
- Evaluate candidates using interviews, skill assessments, and sample tasks to see whether their experiences meet your expectations.
4. Emphasize the onboarding process
Many corporate boards view succession planning as simply setting term limits for board members. However, term limits alone don’t produce the desired results since up to 46% of board member transitions become disappointments in two years.
High-performing boards emphasize the secretary’s onboarding process to ensure their adaptation and smooth performance in the future. This process should take multiple stages.
| 1. Before the incumbent | Gather and organize board materials required for the new secretary. |
| 2. Incumbent date | Introduce qualified candidates to the board directors and the executive team, and explain their roles and responsibilities. Explain the board culture and the organization’s strategic objectives, and make facility tours. |
| 3. Board training | Let the new secretary access your workspaces and learn your corporate governance documents, protocols, and procedures. Let them participate in several board meetings and understand the process in your organization firsthand. |
| 4. Mentorship | Let your new secretary work with a mentor (Ideally, the current secretary) to support a smooth role transition. Incorporate job shadowing and introduce the new secretary to the consent agenda and other high-performing board practices. |
| 5. Performance assessment | Evaluate the new secretary’s performance regularly to understand whether they’re a good fit for the role. |
Challenges in board succession planning
Succession planning for the board of directors is essential to ensure the organization’s well-being. However, for many boards, the process goes with its set of challenges. They not only cause delays, but they can leave organizations exposed to significant risks when leadership gaps emerge unexpectedly.
To tackle these risks effectively, boards need to understand and address three main challenges that often get in the way.
Resistance to change
It’s not a surprise that long-serving board members bring expertise and stability, essential assets for any organization. At the same time, leaning too much on these members makes it harder for boards to stay flexible and adaptable. Beyond that, a widespread hesitation to change stems from a stability-oriented mindset and is one that many boards find difficult to overcome.
Without intentional changes, boards risk falling behind and missing opportunities to grow. Here’s how to tackle the issue effectively:
- Set term limits or establish regular performance reviews to ensure the board’s composition aligns with current and future organizational needs.
- Conduct independent evaluations to identify areas where new ideas or skills could strengthen the board’s capabilities.
- Regularly review the board’s performance to spot areas for improvement and plan for necessary changes.
Lack of future-focused skills mapping
Planning for the future requires a clear understanding of upcoming challenges, but many boards overlook the skills they’ll need. This issue is compounded by a reduced focus on workforce development and the talent agenda, which fell from 70% in 2023 to 56% in 2024, according to the EY Americas Board Priorities 2024 report.
Ultimately, failing to manage this gap leaves boards exposed to operational disruptions. Otherwise, boards risk missing opportunities in fast-changing industries.
Steps to handle this challenge:
- Compare the board’s current expertise with the organization’s future needs.
- Use scenario planning to identify trends and disruptions that could shape the industry.
- Establish connections with candidates who bring the skills and insights your board will need.
Sensitivity around succession discussions
Leadership transition discussions usually are difficult, particularly when they include long-tenured members with deep-rooted ties to the board.
Personal connections and concerns about potential conflict often make these discussions uncomfortable. But avoiding them doesn’t solve the problem—it only makes the need for planning more urgent.
For this, the board development committee should aim to create an atmosphere where these conversations feel open, constructive, and part of the regular process.
Steps to address this challenge:
- Add succession planning as a regular agenda item to remove the stigma around it.
- Create policies and timelines so everyone understands the process and expectations.
- Independent facilitators can guide conversations and keep them productive.
Board succession planning best practices
You can benefit from the following practices to complement your succession planning process:
Approach board succession strategically
High-performing companies take a strategic approach to board succession planning:
- Make board succession a priority for a nominating committee. It should adopt a continuous planning process discussed regularly by the full board.
- Set tenure expectations. Design tenure limits for secretaries and see how they align with other upcoming vacancies.
- Ensure leadership continuity. Consider other board member departures while planning secretary turnover so that someone within the team can temporarily take on the secretary’s responsibilities.
- Plan for the secretary’s departure ahead. Start preparing for a secretary’s retirement in advance based on regular skill assessments. Identify the candidates’ best skills and experiences to match the current and future needs of your organization.
Conduct regular skill assessments
Organizations achieve the best board succession outcomes when assessing the board’s collective performance and individual directors.
Qualitative and quantitative assessments help measure how board secretaries fulfill their duties and whether they have relevant expertise.
Board effectiveness practices will also help bridge the gap between directors’ self-perception and real KPIs. According to Accenture, 68% of executives believe they contribute to employee empowerment, but only 36% of employees agree.
Your organization can follow these practices to lay a solid foundation for informative secretary skill assessments:
- Use a skill matrix. Identify areas of expertise crucial for the board secretary, including corporate law, compliance, and time management. Map desired skills, including active listening, record keeping, technology proficiency, problem-solving, etc.
- Define criteria. Establish secretary performance evaluation criteria, such as background and experience, meeting attendance, documentation submission deadlines, meeting minutes accuracy, and others.
- Gather data. Make secretary self-evaluation surveys, interviews, and surveys of board directors, C-suite executives, and shareholders. Evaluate KPIs as well.
- Create secretary succession insights. Fill out the secretary skill matrix based on evaluation results and identify your secretary succession needs and practices accordingly.
Leverage the power of technology
Based on Deloitte’s insights, only 31 out of 100 companies have tech-savvy boards. This means many board directors use occasional spreadsheets combined with numerous paper documents. It is cumbersome, time-consuming, and ineffective.
Instead, proactive boards can leverage the power of board management software, such as iDeals Board.
Among these platforms, iDeals Board is a comprehensive document management solution that is easy to navigate, according to the users’ reviews. It’s known for its ease of use and strong protection capabilities, making it a go-to choice for organizations in different industries.
With iDeals Board, the board succession materials are centralized and securely stored. Additionally, it’s much easier to customize workflows and fine-tune access permissions for each user.
Beyond that, iDeals Board integrates seamlessly with existing tools, such as Microsoft Teams and Zoom, reducing the need for complicated setups.
iDeals Board facilitates succession planning activities in the following ways:
- Central document repository. Access corporate secretary surveys, skill matrices, candidate profiles, and other materials.
- Action items tracking. The system tracks attendance, document engagement, votes, tasks, comments, discussions, Questions & Answers, and other activities. Drill-down activity reports help corporate directors evaluate their secretaries’ current capabilities with maximum accuracy.
- Agenda builder and board book viewer makes succession planning an ongoing process. Plan for secretary departures using tasks, event calendars, digital meeting agendas, and system notifications on desktop and mobile devices. Tasks, Q&A workflows, and discussion tools help you address succession planning regularity.
- With two-factor authentication and single sign-on, you can recruit new secretaries safely. Interview and onboard candidates without sacrificing privacy due to role-based access and top-notch document security.
Board of directors succession planning templates
You can also check a few more templates for your board director succession planning process:
- Board succession planning template for all board members.
- Board leadership succession planning template for a nonprofit organization (p.36).
- Detailed step-by-step guide for CEO succession and board chair succession planning.
What goes into grooming future corporate secretaries?
A succession plan for a future corporate secretary is as demanding and comprehensive as the job itself.
The person being groomed for the positions needs to fill big shoes. Meaning that by the time they take over, critical ties should already be established with the board, senior management, and legal team.
Furthermore, for the transition into the new role to be as smooth as possible, these unique individuals must be privy to a wealth of valuable job-related information. To clarify, if governance, regulatory, and compliance records are lost, it’ll send the board as well as the organization to a screeching halt.
Corporate experts believe that it’s wise to hire an assistant corporate secretary who can learn the ins and outs of the role daily.
On top of that, have the successor sit in on board meetings that concern auditing and governance.
What else is crucial for future corporate secretaries?
The most valuable trait of an organization’s corporate secretary of the future is they must gel with management and the board.
Lastly – and this is as critical of a skill as it gets – the successor for this position must show an aptitude for crisis management.
Without that one essential quality, all the other abilities virtually mean nothing. Life on the board has twists and turns for which corporate secretaries must be eternally vigilant. If you’re on the fence about succession planning, hopefully, this article gave you a helpful nudge forward.
Key takeaways
- Future boards will have to address the aging population, manage diversity, and bridge the generational gap in their succession plans.
- A robust board succession plan ensures wise board turnover, higher shareholder trust, better firm performance, seamless leadership transition, and enhanced board diversity.
- Wise succession planning falls to the nominating and governance committee that oversees recruiting and onboarding processes.
- Boards should make succession planning for future board members an ongoing process, prepare for transitions a year ahead, and use board portals for maximum efficiency.
iDeals Board is ready to simplify your succession planning journey with its intuitive interface, innovative security features, powerful board workflows, and 24/7 technical support.