Succession planning is something that companies often overlook or ignore - and this oversight is something that can cause a lot of damage to a company when a key executive suddenly resigns, such as in the case of last week`s shock resignation of SAA`s chief executive, Andre Viljoen.
Said Org Geldenhuys, a co-founder and director of leading IT recruitment and executive search specialist, Abacus Recruitment: "Sudden departures, without announcements about successors, can cause quite a stir. This is aptly highlighted by a recent press report about the sudden departure of Viljoen. The article said the news has set tongues wagging throughout the industry. The problem with SAA is that Zukile Nomvete and the American Coleman Andrews, who was head-hunted to succeed him, both lift the airline amid financial difficulties. A smooth succession plan is speedily needed."
Commenting further, Geldenhuys said companies` reputations and overall valuations - including share prices - can come under strain when a top executive resigns and there is no succession plan. "This is a major oversight in the corporate business world. Not just here, but overseas too. When a company appoints a CEO it should immediately start looking for his successor, or a shadow CEO. A smooth transition is utterly essential, epically when there is a sudden departure and not a planned-for retirement. But it is strange that, even when a company knows that a CEO is due to retire, they are slow on a succession plan. Often retirement time is reached and still there is no replacement waiting in the wings. The market understands that companies are made up of people and the key people are the ones who add real value to the company.
"It does appear, however, that Viljoen may have been headhunted by a foreign airline - something that is always a possibility with top people. Top executives are in short supply - and in big demand. Companies should anticipate the worst and make sure they have a plan in place that can be put into action fast and smoothly in the event a key executive resigns - for whatever reason."
News reports on the resignation of Andre Viljoen, chief executive of SAA, state he is the airline`s third chief executive to leave before his contract is up. Under Viljoen the airline achieved a record operating profit of R441 million in financial 2002/03 - one of the few airlines to do so in a difficult year for the industry.
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