Guideline on Succession Planning and People Management

Key roles in managing risks concerning human capital and opportunities fall upon the Board, particularly the succession of key positions and effective people management system. Previously, the scope of succession planning seemed to limit to the CEO and senior management positions. However, the success of any organization does not lie solely on senior management but also on diverse expertise of employees at various levels.

This Guideline is meant to help the Board oversee succession planning and people management, and to propose issues on human rights as they tend to be substantial factors for international trade and investment that could yield material impact on the organization’s image and stakeholders’ confidence. The guideline divides into two sections including 1. Key Principles and 2. Guidelines. 

Key Principles of this guideline are as follows:

1.       Governing the succession planning of CEO and key management positions as well as people management framework are among key roles of the Board. The Board may assign a committee to screen information and propose for Board approval.

2.       The Board should receive adequate information from the management as well as support from departments within the organization to perform its duties effectively.

3.       The Board should regularly consider agenda concerning succession planning and people management.  A committee can be assigned to proceed and report to the Board.

4.       The Board should set up a transparent system to evaluate annual performance of the CEO, applying both financial and non-financial performance indicators.

5.       The Board should consider compensation structure that motivates the CEO to perform in alignment with the organization’s objectives, purpose, short-, medium-, and long-term strategies as well as competition landscape.

6.       The Board should set CEO succession policy and guidelines, considering both internal and external candidates with qualifications that align with business context, business operations, organizational culture, and business environment.  The Board should openly communicate the CEO succession result with all stakeholders.

7.       The Board should ensure the succession plan for the management and key positions are in place to maintain business stability and continuity.

8.       The Board should ensure the development schemes for those in the succession plan as well as all employees in the organization are in place. Ongoing development plan and structure should be laid clearly to ensure people in the organization possess desirable knowledge, understanding, and experience.

9.       The Board should ensure compensation structure, policy, type, and method are fair, appropriate, and adequately motivated. The structure should align with both individual performance and organization’s long-term performance, and should be communicated with relevant parties.

10.    The Board should emphasize on human rights and set basic guidelines, adhering to relevant laws and international standard. This is meant to ensure the organization operates ethically, does not violate stakeholders’ rights, and respect human rights throughout the supply chain.

11.    The Board should ensure human rights policy and guidelines are concretely implemented, monitored, and disclosed to stakeholders and the general public. 

For full "Guideline on Succession Planning and People Management" please download below