Preparing for the emergency or planned transition of executive leadership is a crucial responsibility of a board of trustees. Historically, Mosaic has found that executive succession did not receive much board attention until a departure of an executive occurred or was on the immediate horizon. But the aging of the executive-level leadership cohort coupled with the increased pace of executive retirement announcements have moved the topic of succession planning up in the priority list. Boards are now asking more questions about their role and how they can be more proactive and effective in carrying it out.
Even with increased interest, however, we have found that many public pension fund boards are slower out of the gate to engage in succession planning than they’d like. Why? Because the conventional “announce and search” model no longer meets the needs of the organization and there isn’t a universally accepted alternate approach. Simply put, the industry is in need of a new model.
So when Mosaic was recently asked by a public fund client to design an executive succession readiness process, we were eager to help them innovate. This type of request was not surprising given this board’s reputation for excellence, industry leadership, and “relentless pursuit of best practices” philosophy.
Mosaic’s team designed and implemented a multi-step process that included individual interviews with board members and select executive and senior staff, a leadership style assessment of the chief executives, a facilitated discussion of the results among the board to build consensus, and documentation of the board’s direction within updated position descriptions. The concept was to hold the types of board discussions, based on our experience, that ought to happen well before hiring an executive search firm or announcing an executive retirement. We uncovered observations and insights to inform the board’s discussion across the areas of organizational culture, strategy, and the leadership behaviors and competencies exhibited by the chief executives that led to the current level of organizational success. Snapshots of the organization’s evolution and today’s environment were juxtaposed with the board’s preferred future vision, an examination of the system’s future business needs, and the consensus sentiment of the critical issues that would likely need to be addressed to garner continued success.
The board members believed that the facilitated discussion translated into time well spent to fulfill their fiduciary duty to the system. They acknowledged that they discussed the right topics based on the right information to prepare the organization for the future and mitigate the impact of turnover at the chief executive level. Participating staff appreciated the inclusiveness of the process and the ability to have their voices and input reflected in the discussions. Our team appreciated the opportunity to design a completely custom solution for what we believe will soon be recognized as an emerging best practice in public retirement system governance.