Succession Planning Done Right: What Boards Should Be Thinking About Now

Succession planning is one of those topics boards agree is important, but often delay until it becomes unavoidable. A sudden resignation, an unexpected illness, a planned retirement and what should have been a calm, structured process turns into a reactive scramble.

For AIM companies, private companies and those on the LSE, succession planning is no longer a “nice to have”. Investors, regulators and stakeholders increasingly expect boards to demonstrate that leadership continuity is actively managed, not assumed.

Succession planning is not just about the CEO

A common misconception is that succession planning begins and ends with the CEO. In reality, boards should be thinking much more broadly. Executive directors, key senior management, committee chairs and even certain non-executive roles can create real risk if there is no clear plan in place.

The question boards should be asking is simple: if this person stepped away tomorrow, what would we do? If the answer is unclear, that is a governance gap.

Emergency cover versus long-term planning

Good succession planning has two layers.

The first is emergency cover. Boards should be confident that there is a credible interim solution if a key individual becomes unavailable at short notice. This does not need to be perfect, but it does need to be realistic and documented.

The second is longer-term succession. This involves identifying future leaders, assessing readiness and understanding what development is required. For growing AIM and private companies in particular, internal successors may be capable but under-prepared without targeted support.

It should be a live board agenda item

Succession planning should not be a one-off annual discussion or something only revisited during a crisis. Best practice is for boards to treat it as a standing governance topic, often owned by the nomination committee.

This means regularly reviewing succession plans, testing assumptions and updating them as the business evolves. Strategy changes, acquisitions and international expansion all affect what “the right successor” looks like.

Be honest about capability and timing

One of the hardest parts of succession planning is honesty. Boards need to be candid about whether internal candidates are genuinely ready, or whether external recruitment is more realistic. Over-optimism can be as risky as having no plan at all.

Equally, timing matters. A successor may be strong, but not yet ready to step into the role without destabilising the business. Recognising this early allows boards to plan transitions properly, rather than forcing rushed decisions.

Documentation and communication matter

Succession plans should be documented clearly, even if they remain confidential. This supports continuity, accountability and regulatory expectations, particularly for listed companies.

Clear communication is also key. While not every detail needs to be shared widely, senior leaders should understand that succession planning is about strengthening the business, not signaling imminent exits.

A mark of a well-run board

Ultimately, effective succession planning is a sign of a confident, forward-looking board. It reduces risk, reassures investors and gives the company the stability it needs to execute long-term strategy.

The best time to think seriously about succession planning is not when someone is about to leave, it is now, while there is time to do it properly.