Why HR has a key role to play in corporate succession planning

When it comes to strong corporate governance, ensuring your company has a clear contingency plan in place is key, partner and co-head of Torys’ Pensions and Employment practice Lisa Talbot said in an interview with HR Reporter.

“It's really quite important, especially at the C-suite level, and for other critical senior leaders, that you've not only given some thought to who might be the right person, but you've really honed in on what the plan would be,” she said.

It’s important that this plan is created with the involvement of not only senior executives, but also with the Human Resources team as well as the board.

“Any succession plan that involves the C-suite is going to engage the board, and the board should, through their HR committee, have a plan that they're updating at least annually, if not more frequently, depending on moves within the C-suite, to ensure that they’re not flat-footed,” Lisa said.

“HR, ideally, would be involved in driving that initiative, and whatever C-suite succession planning the board is engaged in would be part and parcel of a broader effort that HR would be running.”  

Another reason Lisa stresses the importance of having HR involved in the contingency planning process is because, in the event of a CEO leaving the company without notice, the Chief Human Resources Officer (CHRO) is often the person who must step in to ensure the transition goes smoothly. 

“… [F]or a succession plan to work properly and to allow for an immediate transition of responsibilities, the candidate would have to be, I think in most cases, an internal candidate who would step up to be the interim on such short notice,” she said.

Having the CHRO step in, however, comes with important legal and contractual considerations, Lisa stressed.

“You have to be careful that you're not making an offer of employment—you're letting them know that ‘In these circumstances, our current planning is that we would be looking to you to serve in this role on an interim basis.’”

Learn more about Torys’ Employment and Pensions Litigation work on the practice page. 

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