In a perfect world, when one professional retires or moves on, there’s an equally successful and seasoned individual waiting to take his or her place. In reality, however, this is not always the case.
This year, the oldest baby boomers – those born in 1946 – will turn 65. As an entire generation moves toward retirement age, many businesses are starting to spend more time thinking about hiring, talent pools and succession planning.
Depending on the size of the organisation, legal departments tend to have a corporate secretary who also serves as general counsel. In many cases, that professional has been trained for many years and is equipped with the necessary knowledge and skills to make sure the board is updated on all regulatory developments and requirements.
When it’s time to replace a corporate secretary, a company’s needs tend to be specific, as the nature of the position is so sensitive.
‘Boards of directors want a top-notch general counsel who will be their trusted business advisor,’ says Cary McMillan, chief executive officer of True Partners Consulting, a global tax and business advisory firm. ‘But that takes work on the company’s part, as attorneys are in the minority at most corporations.’
This is what makes it particularly difficult to fill the corporate secretary position. Companies are looking for specialised talent and experience – and in large doses. Furthermore, the long careers of some corporate secretaries result in substantial amounts of accumulated legal and company knowledge, which ultimately makes replacement (and succession) a greater challenge.
‘Those who do become corporate secretaries tend to do so in their mid to late thirties,’ notes John McGuire, a partner focusing on corporate law matters at Ohio-based law firm Calfee Halter & Griswold. ‘They often retire from the position along with their early retirement from main employment – say, late fifties or early sixties.’
As with any key executive position, your company should have a succession plan for corporate secretaries. When yours retires – or, for that matter, when you retire – will your company be ready to continue moving forward?
‘I believe that succession planning for senior positions in any organisation plays a vital role in achieving consistent, long-term success,’ says Fred Krebs, president of the Association of Corporate Counsel. ‘Succession planning requires careful thought and deliberation about what the organisation needs and how to fulfil those needs.’
McGuire, who specialises in succession planning, agrees with this sentiment, strongly believing that a comprehensive plan of action should be in place by the time a corporate secretary is ready to leave the firm.
‘Succession remains a critical issue at any firm,’ McGuire explains. ‘The folks remaining behind need to know what is expected of them. Things can change abruptly, and you need to be prepared.’ Adding to the problem is the uncertainty that many firms face when it comes to succession planning – as evidenced by the mushrooming collections of analyses on this issue.
A recent study by American Management Association (AMA) Corporate Learning Solutions, for example, finds that only about one third (34 per cent) of organisations remain committed to succession planning. Roughly two in five (43 per cent) said such planning was intermittent.
‘The findings point to a looming management succession crisis among North American companies,’ says Sandi Edwards, senior vice president of AMA Corporate Learning Solutions, which offers advisory services and tailored learning programs to organisations. ‘Just a small minority of organisations seem ready to manage a top-level succession in an emergency, which means most companies are taking a huge risk by failing to address their bench strength issues.’
Despite succession planning being a strategic pillar in overall business performance, it remains in a sad state of disarray. In fact, an analysis conducted by the Institute for Corporate Productivity on behalf of the American Society for Training & Development reveals that only 14 per cent of 1,247 respondents rated their exit plan procedure as effective to a large or very large extent.
When it comes time to replace a corporate secretary, the issues encapsulated in these numbers will become all too real. The best advice for companies is to get ahead of the issue and start planning for the future today.
Click here to see who’s not ready >>
[Article by Aarti Maharaj, Corporate Secretary]
Business Insider Emails & Alerts
Site highlights each day to your inbox.