Following the publication of a discussion paper on board
succession planning in October 2015, on 23 May 2016, the Financial
Reporting Council (the "FRC") issued a feedback statement
on the issues surrounding board succession for both executives and
non-executives. The key points identified by respondents
establishing a clear link between the business strategy of a
company and its succession plan and talent development
suggestions as to how to increase the standing of the
nomination committee and improve its reporting to provide enough
information (subject to commercial sensitivities) to all classes
and sizes of investors about the committee's role in managing
suggestions as to how to offer more management experience (for
example, by providing board apprenticeship schemes and offering
more exposure to directors and board experiences for those on track
to be considered for board positions);
the role of continuous board evaluations and separate board
sessions (rather than conducting annual evaluations) to inform and
influence succession planning;
the incorporation of diversity thinking in achieving a holistic
approach to boardroom inclusion in an organisation; and
the need for better reporting on board quality without
disclosing insider information to investors.
The FRC has committed to avoiding updates to the UK Corporate
Governance Code until 2019. Guidance in this area therefore will be
considered as part of the revision of the Guidance on Board
Effectiveness, which will begin later this year.
The FRC's feedback statement can be accessed here:
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