BOARD ADVISORY · EXECUTIVE BOARD SUCCESSION
Few decisions shape a company for as long as the appointment of its executive board. Yet in many supervisory boards succession planning only starts when a contract expires, a board member resigns or a conflict escalates. By then, exactly what a good appointment needs is missing: time, alternatives and a clear picture of who should lead the company into its next phase.
Succession is the supervisory board’s job
In a German stock corporation the supervisory board appoints the members of the executive board (Section 84 German Stock Corporation Act). The German Corporate Governance Code also recommends that the supervisory board, together with the executive board, ensures long-term succession planning and describes its approach in the corporate governance statement. In a GmbH or family business, responsibility lies with the shareholders’ meeting or advisory board, depending on the articles. The logic is the same: succession is not a staffing question for management but a governance task for the board.
Six decisions that should be taken early
1. The future picture
Which strategy should the next executive implement, and what capabilities does it require? Deriving the profile from the past often means looking for a copy of the incumbent.
2. The emergency plan
Who steps in on an interim basis if a board member drops out at short notice? A documented emergency plan prevents a crisis from producing the nearest rather than the right solution.
3. The internal candidates
Which internal leaders could be ready in two to five years, and what do they still need to prove? Internal candidates need development assignments and honest feedback, not just goodwill.
4. The external market comparison
Even when an internal solution seems obvious, a structured look at the market shows whether it really is the best. It also protects the board from the criticism of having appointed internally out of convenience.
5. Timeline and confidentiality
When must the decision be made, who is involved and how will it be communicated? Listed companies also face capital markets law questions. A small circle of people involved is almost always better than a large one.
6. The handover
A good appointment can fail through a poor handover. Clear roles between outgoing and incoming executive, an onboarding plan and early exchange with the board chair are part of the process.
Common mistakes
- Planning starts only once the seat is vacant.
- The profile describes the incumbent rather than the future task.
- An internal favourite is never compared with the market.
- The chairs of the supervisory board and the executive board change at the same time.
- Nobody owns the first hundred days after the change.
How I support supervisory boards
I help supervisory boards, advisory boards and owners approach succession early and in a structured way: from the future profile and the assessment of internal candidates to the external search and handover. More under CEO Succession and Board Advisory.
Further reading
Executive board search under time pressure: seven decisions before the first candidate interview · CEO succession in private equity