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CEO SUCCESSION PLANNING
[ 2 ]
MEET THE SPEAKERS
Faculty:
Kurt Bock, CEO (Retired), COUNTRY Financial
Kevin Kinross, Partner, Taft Stettinius & Hollister
Panelists:
Rick Means, Chairman, Shelter Insurance
Stuart C. Henderson, CEO (retired) Western National Insurance
Robert M. Zak, Chairman, Merchants Mutual Insurance
NATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES
2021 Directors' Bootcamp 2.0 - Bock & Kinross 1 of 7
THE CEO
SELECTION PROCESS
[ 4 ]
WHAT IS YOUR SUCCESSION PHILOSOPHY?
NATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES
• Boards should approach CEO succession as part of a larger leadership preparation and development program—CEO succession is a process and not an event.
• All key positions, not just the CEO, need to have both potential candidates and immediate replacements in the pipeline.
• Just as the CEO needs to be responsible for the development of potential senior leaders, the Board needs to be responsible for the development of the CEO.
• The Board should have annual discussions on senior leader succession with the CEO with focus on internal succession candidates.
2021 Directors' Bootcamp 2.0 - Bock & Kinross 2 of 7
[ 5 ]
TYPICAL SELECTION PROCESS MECHANICS
• Select appropriate timeline to complete selection and provide appropriate transition
• Board determines specification criteria for position and attributes desired• Consider communicating the process throughout the company • Determine candidate pool (internal, external)• Determine interview process and final candidate selection process• Screen candidates using questionnaires, testing, organizational
psychologist consultation, interviews, etc• For non-selected candidates, use opportunity for growth discussions• Board should oversee the transition process
NATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES
Internal Candidates vs External CandidatesInternal Candidates vs External Candidates
2021 Directors' Bootcamp 2.0 - Bock & Kinross 3 of 7
• Supports talent building process already in place
• Simplifies process; tailored to the Board’s desires
• Uses structures and processes already in place
• Provide access to expertise and advice• Allows for additional outside candidates• Provides a proven vetting process and
assistance in salary negotiation
CEO Consulted
CEO Fully Participates
Board Only
How much participation from current CEO?
2021 Directors' Bootcamp 2.0 - Bock & Kinross 4 of 7
What Kind of Transition Process?
Do we have a process for talent management and development to fill the pipeline?
Have we benchmarked compensation correctly to attract the best possible talent?
Are we aligning leadership with strategy and culture?
Does our process also develop aspirational candidates?
Will using an outside advisor overlook internal candidates?
How will we effectively communicate with the company employees during this process?
Questions the Board Must Weigh:
2021 Directors' Bootcamp 2.0 - Bock & Kinross 5 of 7
[ 11 ]
THE “GOLD STANDARD” IN CEO SUCCESSION
1. Align the board on future CEO profiles that are driven by business strategy.
2. Assess candidates against industry benchmarks, valid indicators of executive potential, and the CEO profiles you’ve developed.
3. Think 2-to-3 CEO moves ahead; don’t just seek to replace the incumbent.
4. Ensure the next generations of CEO successors “cross train” with a mix of on-the-job training, intensive coaching, mentoring, and education.
5. Become intimately familiar with the bench and their potential.
6. Keep CEO succession as a standing board agenda item since it ensures a multi-layered, multi-generational process.
7. Ensure that your company’s talent management and development planning is linked to your longer-term business strategy.
NATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES
Luby, Victoria and Jane Stevenson, “Seven Tenets of Good CEO Succession,” Harvard Business Review, December 7, 2016.
THE CEO
SELECTION PROCESS
2021 Directors' Bootcamp 2.0 - Bock & Kinross 6 of 7
CEO SUCCESSIONFaculty:
Kurt Bock, CEO (Retired), COUNTRY FinancialKevin Kinross, Partner, Taft Stettinius & Hollister
Panelists:Rick Means, Chairman, Shelter Insurance
Stuart C. Henderson, CEO (retired) Western National InsuranceRobert M. Zak, Chairman, Merchants Mutual Insurance
[ 14 ]
Images used on Slides 2, 5, 6, 7, 8, 9, and 11 are used under license from Getty Images, dated January 2021.
Slide 10 was drawn from Victoria Luby and Jane Stevenson, “Seven Tenets of Good CEO Succession,” Harvard Business Review, December 7, 2016.
CITED SOURCES
NATIONAL ASSOCIATION OF MUTUAL INSURANCE COMPANIES
2021 Directors' Bootcamp 2.0 - Bock & Kinross 7 of 7
RECOMMENDED RESOURCES
CEO Succession
Websites
CEO Succession Planning & Talent Oversight Resource Center, National Association of Company Directors, provides
additional resources for boards to use in CEO succession planning.
The Conference Board provides numerous resources for CEO succession practices including a Hedrick and Struggles
developed research report available for download.
Executive recruiting firms all provide thought papers and articles on CEO succession. These may be found from firms
including Heidrick and Struggles, Russell Reynolds, Spencer Stuart, and others.
Articles
Cheng, J. Yo-Jud, Boris Groysberg and Paul Healy, “Your CEO Succession Plan Can’t Wait,” Harvard Business Review
Digital Article, May 4, 2020.
Luby, Victoria and Jane Stevenson, “Seven Tenets of Good CEO Succession,” Harvard Business Review, December 7,
2016.