The following are among the key takeaways from Spencer Stuart’s survey on director succession and board refreshment practices, which surveyed 932 public and private company directors.
Succession tools—More than half of companies use full board assessments, board skills matrices, and board committee assessments to inform their board succession strategies.
Succession tool effectiveness—Full board assessments, board skills matrices, and board committee assessments were also deemed the most effective board refreshment tools, with 82%, 83%, and 79% of respondents, respectively, rating them as at least somewhat effective.
Succession strategies satisfaction—Nearly three-quarters (72%) of respondents indicated that their board should not change its boardroom succession strategies. Of those who reported otherwise, more than half expressed an interest in adopting tenure limits, which, as revealed in Spencer Stuart’s 2024 US Board Index (reported on here), is uncommon among the S&P 500 (9% of boards). In contrast, mandatory retirement ages, which are used by more than two-thirds of S&P 500 boards, were the third most commonly cited succession “improvement” strategy at 36%.
Barriers to effective succession strategies—More than one-third of respondents identified a reluctance to remove directors whose skills are no longer relevant as a primary barrier to effective boardroom succession, with other board culture-related behaviors also often identified as barriers:
The foregoing results notwithstanding (including nearly one-quarter citing the lack of a clearly defined board succession strategy), an overwhelming 92% of respondents identified a formal board succession strategy as at least somewhat important.