ICGN publishes viewpoint about board succession planning

The International Corporate Governance Network – ICGN – published, in June, a series of guiding notes about the succession planning of boards’ members. The entity points out that, although many companies invest in sophisticated processes for board succession, there are companies that lack a structured process to deal with the matter and adopt approaches that range from wholly outsourced processes to opaque methods where the ultimate decision maker is the controlling shareholder. The document highlights important factors such as board composition, independence, shareholders’ engagement, and board skills and evaluation.
The importance of the nomination (or governance) committees was also highlighted in the guidance document. The ICGN underlines that, given the relevance of the board succession planning, a board committee must take “ownership” for the planning. “Director nomination is fraught with potential conflict with major shareholders, management or other shareholders, so most corporate governance codes, including ICGN’s Global Governance Principles, call for the committee to include independent directors, at least in its majority,” the document says.
The full document is available here.