Succession planning for your business: Finding someone to step into your shoes

Succession planning for your business: Finding someone to step into your shoes

Good governance is the foundation of good organisational performance, and the converse is also true.

Succession planning is a major component of good governance. It involves the aspect of business strategy where leadership roles are passed down from more senior to more junior employees. A company’s succession plan should be reviewed periodically and provide for succession in both emergency situations and over the longer term.  This should include the identification, mentorship, and development of future candidates.

A vital part of succession planning has to do with the replacement of more senior and executive decision makers, and the current leadership crisis at Eskom has demonstrated this clearly. The Institute of Directors in South Africa (IoDSA) has repeatedly said that the appointment of  key state-owned enterprise CEOs has not been in line with good governance, as the board has not ensured that there is succession planning for executive positions in place to provide continuity of executive leadership. This can be seen very clearly in the recent and imminent departure of Eskom’s CEO and Chief Operating Officer (COO).

At Eskom, no obvious successors for the CEO of COO were communicated, which has raised concerns across South Africa.  Considering the current volatile position of Eskom, this is not a good time for the top two (and other senior management) positions of Eskom to be vacant. Eskom’s statement on 14 December 2022 made it clear that there was no planned successor for the CEO position. At this stage, it is also unknown whether there are plans in place for a succession to the COO, due to retire in April 2023, and whether the current COO will be available to hand-over to a successor when one is appointed. Finding successors for both positions is going to be a huge task and demonstrates the importance of succession planning.

Regardless of the size of your business, succession planning is vital to your medium and long-term success. As an employer and/or business owner, start identifying and training up individuals as soon as possible so that people are ready to step in if any your senior and/or critical roles become unexpectedly vacant. This will allow your business to continue to succeed despite movements in senior management or in other critical position throughout your company.

If you would like further advice on succession planning in your organisation, get in touch with one of our consultants at Human Alliance so that we can assist you.

• https://www.investopedia.com/terms/s/succession-planning.asp

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your adviser for specific and detailed advice. Errors and omissions excepted (E&OE)