- Succession planning is a crucial element of business continuity planning. The key objective of succession planning is to ensure that:
- A transition plan is in place to mitigate the impact in the event of “loss” of key senior management/technical personnel through resignation or retirement or otherwise;
- Strategic corporate and/or technical knowledge is retained and transferred within the organization; and
- The operation of the Group continues to run with minimal interruption.
- It is the Board’s responsibility to ensure that all candidates who are appointed to senior management or technical positions are capable enough and to satisfy themselves that there are programmes in place to provide orderly succession.
- Annually, the Board shall work with the Nomination Committee in reviewing the succession plan established by the Management to ensure that the objective of succession planning is achieved. In this respect, when reviewing the performance of the key management/technical personnel and Executive Directors, the Nomination Committee shall consider the management succession plan as part of its review of the performance of the top executives.
- When deliberating the management succession, the Board, in consultation with the Executive Directors and Nomination Committee, shall
- Determine the critical positions, the employees’ age profile and years of service and the expected vacancies;
- Identify the current and future competencies and the gaps in the current employees’ competency levels;
- Identify from the pool of internal staff suitable candidates and develop individual development plans which include coaching and mentoring for these high potential employees;
- When the internal pool of candidates is insufficient, the Board shall activate plans to track and/or hire from the industry;
- Determine the leadership transition period and ensure that the resignation notice period of critical positions provides sufficient time for smooth transition;
- Consider interim measures of stepping in when replacement for critical positions, be it key senior management or technical has yet been identified; and
- Assess the effectiveness of the approaches used in corporate communication to manage expectations and avoid misunderstanding with stakeholders.
- In identifying candidates for appointment of directors, the board does not solely rely on recommendations from existing directors, management or major shareholders. The board utilises independent sources to identify suitably qualified candidates. If the selection of candidates was based on recommendations made by existing directors, management or major shareholders, the Nominating Committee should explain why these source(s) suffice and other sources were not used.
- In order to support and assist the Board in reviewing and assessing the effectiveness of implementing succession planning, the Executive Directors shall:
- Ensure that succession planning is integrated with human resource planning and business planning;
- Align appraisal, training, learning and development, staffing, recruitment, remuneration, diversity and employment equality with the Group’s corporate/management succession plan;
- Inculcate awareness about the importance of effective succession planning with the senior management;
- Implement an appraisal process to facilitate feedback from multiple perspectives and sources for a fairer and transparent evaluation and assessment of candidates and employees;
- Develop sufficient pools of talent for key areas and positions to aid selection; and
- Report the development and programme of management succession planning to the Nomination Committee and propose adjustments, policies and actions where needed.