The Board and succession planning for a CCO - a podcast by Thomas Fox

The 2020 Update mandated a Board of Directors ensure “the sufficiency of the personnel and resources within the compliance function, in particular, whether those responsible for compliance have: (1) sufficient seniority within the organization; (2) sufficient resources, namely, staff to effectively undertake the requisite auditing, documentation, and analysis; and (3) sufficient autonomy from management, such as direct access to the board of directors or the board’s audit committee.” Here are six steps to utilize. 
Examine the key corporate documents. This includes Board review of all relevant corporate governance documents, including guidelines, the Charter for Board Governance, the director nomination policy and any relevant policies setting out the appropriate protocols and procedures.
Use an assessment framework. 1) the current strengths and weaknesses of the CCO; 2) the short­ and long-term skills needs of a CCO; 3) evaluating how the Board’s assessment changes regarding departing CCOs; and 4) shifting the Board’s approach to oned based on criteria such as organization needs and director performance.
Conduct due diligence. Conduct an executive level due diligence background investigation, not simply a background check.
Maintain a pipeline. Every Board should maintain a pipeline of qualified candidates. Conditions may arise, such as health or other personal emergencies, that call for rapid director succession. It’s crucial that there are potential qualified candidates on hand to fill the gap quickly.
Assess Board policies. Just as a company should periodically assess and reassess its policies and procedures, the Board assess their policies in this area.
Disclose your succession strategy. Both a large number of institutional investors and good corporate governance advocates suggest that companies disclose their succession strategies. It provides greater transparency to stakeholders.
Benchmark your succession strategy. Every Board should benchmark its succession strategy with industry peers around the use of the steps outlined and stay aligned with the evolving policies and positions of large institutional shareholders and good corporate governance advocates.
Three key takeaways:

Refreshment is a hot topic in corporate governance.

Review your Board policies to understand what your company will need going forward.

Transparency in succession planning.

Further episodes of 31 Days to a More Effective Compliance Program

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