Deloitte Top 200: CEO succession – how boards should choose a chief executive

Detailed summary

A change of the guard at some of New Zealand’s biggest organisations this year has highlighted one of the most important responsibilities for a board of directors: choosing the…

Anotonia Watson, Miles Hurrell and Vittoria Shortt stepped down from their CEO positions at ANZ, Fonterra and ASB this year, highlighting a big responsibility for corporate boardrooms.

A change of the guard at some of New Zealand’s biggest organisations this year has highlighted one of the most important responsibilities for a board of directors: choosing the next chief executive.

Fonterra, ANZ New Zealand and ASB have all announced changes at the top this year, while leadership transitions have also been taking place across other prominent New Zealand businesses and institutions, including One NZ and the Financial Markets Authority.

For board chairs especially, this is an inevitable challenge they need to be prepared for.

Forsyth Barr managing director Carl Blanchard says appointing a chief executive and knowing when the tenure of an existing CEO has run its course is one of the most important decisions a board makes.

Good succession planning should begin with the company’s future rather than the identity of the potential candidates, he says.

“At the outset, the board must have a clear view on future strategy, from which the skillset of a CEO will be determined,” Blanchard said when asked to comment on this year’s Deloitte Top 200 Chairperson of the Year finalists.

Forsyth Barr sponsors this year’s award, which is contested by Alison Gerry of Infratil, James Miller of Channel Infrastructure and Julia Hoare, who chairs Auckland International Airport and Port of Tauranga.

Chief executive succession becomes particularly important when a company has reached a strategic turning point and is entering a period of restructuring or rapid expansion. Blanchard says firms need to ensure they are developing internal candidates who are familiar with the business.

Opening of the article, excerpted from NZ Herald Business. To read the rest, open the article on the publisher's site.