The man at the top looms large in the modern firm. Wherever you go in the firm, you can see his shadow. The CEO has the potential to do much good as well as much harm. Getting the selection of the CEO right is, therefore, one of the foremost functions of the board. Most boards, I am sorry to say, don't get it right; more importantly, they don't give it the attention it deserves.
It was a pleasant surprise, therefore, to read in the October issue of HBR about succession planning at P&G. I must confess I was impressed with the rigour of the process described, with the search starting within the company from the very day that A G Lafley took over as CEO. The distinctive aspect of the process is the involvement of the board. Because of its involvement in the search, the board gets to know several layers of management very well. It occurred to me that succession planning, if taken seriously, can transform the very functioning of the board.
More in my ET column, How to pick a CEO, where I also spell out lessons for Indian companies.
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4 comments:
I agree. A stitch in time saves nine.
A similar process for selection (& evaluation) of Independent Directors, can also fetch long term results and is equally imperative.
Some good companies have evolved heuristic approach of CEO selection; but selection of independent directors and their performance evaluation, still continues to be an Achillies heel for effective governance.
The above thought is smart and doesn’t require any further addition. It’s perfect thought from my side.
I think if the selection of CEO or other higher post in any compoany , fisrt the company should search within it because within its boundary the company has huge talent of the leaders.
This is one of the most crucial step in management. since, the ceo is someone who will be usher for the entire company. fuel injection pipes
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