Firms failing to plan boardroom handovers

UBS's Peter Wuffli (l) left after a succession wrangle RDB

Half of Swiss companies fail to plan properly for the succession of top positions when managers step down, a report has found.

The study’s authors conclude that many managers have difficulty plotting the end of their own careers. The findings come against the backdrop of a number of recent high profile executive handovers in large Swiss companies.

The study conducted by the Zurich University of Applied Sciences and recruitment consultancy Roy C Hitchman looked at the succession policy of 400 of Switzerland’s largest companies.

The most remarkable finding was that only 20 per cent of the biggest firms (10,000 or more employees) had a structured and transparent plan of how to replace executives or boardroom members.

“This is a result of the leader of a company facing up to their own mortality. When you plan your successor you know the end is coming soon,” co-author professor René Rüttimann told swissinfo.

“They are suddenly faced with sharing their knowledge and power. I think a lot of people are afraid of looking into the mirror.”

Dental implant manufacturers Nobel Biocare became the latest Swiss company to announce a change of leadership on Monday with chief executive Heliane Canepa stepping down in a month’s time.

Few women executives

Franz Humer, chairman and chief executive of pharmaceutical giant Roche, will relinquish his CEO role next year. In addition, both of Switzerland’s largest banks – UBS and Credit Suisse – have welcomed new chief executives this year.

Ironically, Rüttimann cited the grooming of former UBS CEO Peter Wuffli as a classic example of how to plan a succession at the top. But after four years in charge, Wuffli abruptly left the bank in July on learning that he had been overlooked as the next chairman.

Problems arise when changes to a firm’s hierarchy are not planned thoroughly or early enough, according to Rüttimann. He also believes there are significant advantages if the successor is appointed from within.

“It is a lost opportunity if someone comes in from the outside. It can cost as much as SFr200,000 ($166,000) in headhunting fees and it takes months before the new manager really gets to know the company,” he said.

The study also showed up a glaring lack of female executives at Swiss companies. More than half of the firms surveyed did not have a single woman in mind to move into a top role.

A fifth of the 400 enterprises only had one women candidate in mind and another 14.5 per cent only took into account two women for positions in the higher echelons of management.

“The lack of women did not surprise us at all,” said Roman Huber of Roy C Hitchman. “It is clear enough that there is not enough women talent, especially in management. It is astonishing that most companies do not try to correct this problem.”

swissinfo, Matthew Allen

Succession of successions

Nobel Biocare Chief Executive Heliane Canepa will hand over the reins to former Syngenta finance chief Domenica Scala on September 1.

UBS CEO Peter Wuffli unexpectedly quit in July after four years in charge. He was replaced by his deputy Marcel Rohner.

Credit Suisse CEO Oswald Grübel retired in May this year, handing over to the bank’s head of investment banking Brady Dougan – the first American to take the role.

Roche CEO and chairman Franz Humer announced in July that he will be stepping down as chief executive next year to be replaced by the company’s head of diagnostics Severin Schwan.

Inga Beale, chief executive of reinsurer Converium, will step aside by the end of the year after the company was taken over by French competitor Scor.