Every company will sooner or later face the departure of a key figure. Sometimes planned, often not. Those who do not have succession planning in place at that moment will be forced to decide under time pressure. And decisions made under pressure are rarely the best. A board of directors that takes its role seriously therefore prepares for succession long before it is necessary.
In this article, you will read about what succession planning at the board level entails, which roles should be included, and how you as a board of directors can build a workable plan. Special attention is given to family businesses, where succession also affects ownership, financing, and family relationships.
What is succession planning at the board level?
Succession planning means that the board of directors actively monitors who can fill the key roles in the company tomorrow and the day after. It goes beyond a list of names. The board determines which positions are critical, what the risk is in the event of an absence, who can grow into a role, and what development is required for that.
Do not confuse succession planning with replacement planning. Replacement planning arranges who temporarily takes over a position in the event of a sudden absence. Succession planning looks ahead structurally: who will be ready within two to three years, and what external options do you keep open if internal talent is not yet ready?
Why succession planning is a core task of the board
The board of directors bears responsibility for continuity, risk management, and long-term value creation. Without a succession plan, these responsibilities remain vulnerable. A good plan yields concrete benefits:
- You limit the continuity risk in the event of departure, illness, or sudden absence of key figures.
- Strategic decisions do not come to a standstill during a leadership change.
- Shareholders, management, and employees feel a sense of calm and direction.
- Succession becomes more objective and less dependent on a single person.
- You build leadership in a timely manner instead of improvising when it is too late.
How a board then translates those succession decisions into action can be read in our contribution on strategic advice for the board of directors.
Which roles belong in the succession plan?
Not every position belongs on the board’s agenda. Focus on roles where an absence would immediately impact strategy, decision-making, or market confidence.
Board-critical positions
- The CEO or Managing Director
- The Chairman of the Board of Directors
- Executive members with key impact
- Leaders of strategic departments or business units
- Specialists with difficult-to-replace knowledge or customer relationships
A simple test
Are you unsure if a role belongs in the plan? Ask these questions. A single ‘yes’ is usually sufficient:
- Does the absence of this position seriously disrupt the strategy or decision-making?
- Is a suitable successor difficult to find, both internally and externally?
- Does the role rely on years of built-up trust or organizational knowledge?
- Does the position directly impact shareholder value or financing?
- Does it take a long time to prepare someone for this role?
Succession planning in 7 steps
1. Start from the strategy
First, determine where the company wants to be in three to five years. Growth, digitalization, professionalization, or an acquisition each require a different type of leader. In a family business, you also link the owners’ vision to this.
2. Select the critical roles
Keep the list short and focused. Too many roles make the process cumbersome. Too few roles create blind spots.
3. Assess internal potential objectively
Look beyond performance in the current role. Assess leadership potential, maturity, strategic insight, and the willingness to bear responsibility. Someone who excels today is not necessarily ready for the top. After all, the priorities of a CEO differ fundamentally from those of an operational manager.
4. Work with time horizons
- Immediately deployable: can take over in the short term.
- Ready within one to three years: requires targeted development.
- Long-term potential: valuable, but not yet ready to step up.
5. Link succession to development
A plan without development actions remains theoretical. Consider mentoring, participation in board meetings, strategic projects, or guidance by experienced directors.
6. Keep an external scenario open
Not every role can be filled internally. Therefore, prepare an external option in a timely manner: a new CEO, an independent director, or targeted executive search. Do not wait until the pressure is high to open that door.
7. Establish governance and decision points
Agree on who prepares the files, how the board decides, how you maintain discretion, and when you review the plan. Without these agreements, succession planning gets bogged down in loose conversations without follow-up.
Succession in the family business: more than just a new leader
In a family business, succession rarely affects only the leadership. Ownership, governance, and operational roles often overlap. The board of directors must consciously keep these three layers separate: who becomes a shareholder, who becomes a director, and who leads the company?
In addition, there is the financial side. A generational change usually involves a transfer of shares, with questions about financing and control. A correct valuation of the family business during succession is a necessary first step.
Finally, keep in mind that the next generation is not always ready immediately. Family involvement is valuable, but it does not replace suitability. Our partner House of Boards advocates in this regard for preparing a generational change at least five years in advance. That lead time provides space for assessment, development, and clear decision points.
Confidential or transparent?
Succession files contain sensitive information, but complete secrecy fuels speculation and internal politics. On the other hand, full openness about names creates unrealistic expectations. A layered approach usually works best:
- Be transparent about the existence of a succession process.
- Communicate clear criteria for advancement.
- Treat individual assessments confidentially.
- Communicate carefully at specific transition moments.
How often do you review the plan?
A formal annual discussion in the board of directors is the minimum. In addition, plan an extra evaluation in the event of strategic changes, acquisitions, or restructurings. And update the plan immediately when a key figure leaves unexpectedly or their availability changes.
Common mistakes
- Starting too late, only when the departure is already in sight.
- Looking only at the CEO and forgetting other critical roles.
- Confusing performance with potential.
- Assessing without objective criteria.
- Relying too much on informal family agreements.
- Failing to provide a contingency scenario for sudden absence.
Conclusion: start today, not at the departure
Succession planning is not an administrative obligation, but a sign of mature governance. A board of directors that knows critical roles, develops talent, and keeps external scenarios open protects the continuity of the company when it really matters.
Interpres guides boards of directors through this process with an independent perspective and discretion. For broader boardroom support, we collaborate with House of Boards, which further explores the theme in its analysis of succession planning at the board level. Do you want to know where your board stands today? Schedule a conversation and we will look at it together.