How do companies get back on a steady succession planning path? Larcker and Stephen Miles of Heidrick & Struggles offer this advice:
* Recognize that succession planning as practiced by most companies gives a false sense of security. "Even though boards have made progress in this area in the post-Sarbanes-Oxley world, most companies' succession planning still isn't even close to being good enough. Make sure your board devotes meaningful time to this exercise, rather than simply checking off the box of a meeting agenda."
* Focus on making succession plans operational. "Companies need to move from the 'names in boxes' approach that gives them a false sense of security to truly developing 'viable' candidates."
* Demand experience from directors. "Regulators are recognizing the importance of a rigorous succession process, and firms should seek directors and/or nominating and governance committee chairs with sufficient experience in this area to ensure it's adequately addressed."