Shadowing the Board (Part 1)

Selecting the future leaders of a company has always been a pain point for organizations. While some organizations believe in bringing in flesh blood, picking someone from the inside has always won the maximum votes.

One option has been the formation of a ‘Shadow Board’. It’s not a new idea; it’s one which has been tried, tested, discarded or nurtured in a lot of companies. While some CEO’s believe that the shortcomings outweigh the benefits, Mr. Mahindra from Mahindra & Mahindra believes that it is how it is done that is more important. Then there are also organizations which agree to the benefits of the shadow committee but do not feel the requirement of forming one. While an extended leadership team exists in many companies, the purpose differs from place to place.

Our company has recognized the benefits of forming a shadow board and trying it out. Succession planning has been picked as one of the focus areas. I am extremely fortunate that I was picked to be part of the core planning and implementation team. So to begin with let’s try and figure out what companies have done so far.

I’ve observed a few companies and picked out common features amongst them:

• The ‘Shadow Board’ typically consists of 6-10 members. Sometimes, it’s made to shadow the existing Management Committee but the size rarely extends to beyond 10.
• The qualifying members are from the middle management. A few companies focus on maintaining an age group from 30-36 but this may vary.
• The team has the freedom to choose 3-4 areas of focus. The existing MC rarely gives them defined projects.
• The members are changed from anytime between 6 months to 2 years.
• The Shadow team is given access to any information they require connected to their focus area – be it Finance, Legal, IT or HR.
• Mentoring this team is given high importance. The mentorship team has members from the board often including the MD.

What is important to run this however, is the top management support. This alone decides the fate of this initiative. In a few companies, the extended leadership team has died with the change in CEO’s.

We’ll discuss the selection of this team in my upcoming posts.

Do you have an extended leadership team/Shadow board in your organization? If yes, how effective is it? How is it run?