Companies often plan for staff rotations, yet the succession of the chairman and other board members remains less coordinated. A recent ESADE study on the strategic role and new challenges of the Appointment and Remuneration Committee reveals that nearly half of firms are not prepared for the departure of their president. In contrast, succession planning shows stronger adoption for other top roles, including CEOs and the broader management team. The data shows 68% of companies have plans for CEO succession and 58% for management teams, while only about 31% cover other executives. The pattern indicates that larger organizations have more formalized measures, whereas small and medium-sized enterprises tend to maintain these practices as part of a longstanding governance habit.
Beyond the legacy of leadership, two critical items remain on boards for future consideration: integration and diversity. To date, integration has been the least prioritized area both by board members and non-members of nomination bodies. In terms of inclusion, a majority still report ongoing engagement at high levels, though the intensity of follow up on criteria and targets handled by Appointment and Remuneration Committees varies. Specifically, only a little more than six in ten respondents expressed a strong sense of commitment. For members outside the commission, diversity, equality, and inclusion metrics appear among the most discussed areas alongside worker health and safety. The ESADE study emphasizes that commitments to promoting incentives for diversity and inclusion for the CEO and senior executives are not reflected in short or long term targets at the same intensity, with only about four in ten reporting alignment in the near term and roughly a third reporting long-term alignment.
Human vulnerabilities and talent management are central to enterprise risk maps, with a majority of companies acknowledging this under their risk oversight. More than eight in ten organizations integrate people risk into risk maps, while roughly seven in ten emphasize contingency planning. Managers who do not sit on the nomination committee often drive regular risk audits, yet they tend to focus on different issues. The board’s attention frequently shifts toward work environment risks and labor protections, along with traditional worker rights concerns, highlighting a divergence in risk priorities between different governance roles.
Strengthening the human resources field
Related news often accompanies this topic. The ESADE report notes a persistent challenge: the need for more systematic and consistent reporting to boards. In many cases, the board relies on human resources to generate these reports, and submission frequency remains predominantly annual. Companies frequently underplay the risks tied to missing critical skills because these gaps can undermine the execution of strategy and the achievement of desired results. Roughly one-third of board members do not regularly audit this parameter, according to the study.
Talent retention, especially for critical roles, also lags in how it is reflected in compensation models. Short- and mid-term incentive plans do not consistently incorporate targets tied to critical talent retention. In practice, large corporations may devote more conscious attention to these issues, while small and medium-sized enterprises tend to prioritize productivity alongside environmental, social, and governance considerations. The broader message is clear: without consistent measurement and explicit targets, the organization risks losing key capabilities that are essential for sustaining long-term performance.
In sum, the findings call for a more disciplined approach to board succession planning, enhanced attention to diversity and inclusion metrics across the leadership spectrum, and a strengthened role for human resources in driving transparent reporting. Aligning governance practices with strategic risk management and clear talent targets can help both large firms and SMEs shore up resilience in the face of leadership transitions and evolving business challenges.