My Life in Treasury
Published  6 MIN READ

Ready for the Future? The Importance of Succession Planning

Ready for the Future?  The Importance of Succession Planning

TMI talks to Christof Nelischer, about the importance of succession planning in treasury.

TMI: You are an advocate of succession planning in treasury. Can you explain your rationale?

CN: I firmly believe that, in general, every organisation should aim to draw on and develop its existing talent, and promote from within. All too often I see corporates hiring staff as and when they need them. My belief is that this seemingly pragmatic approach ignores the fact that while people have a specific role in an organisation, they also have a career path in their minds that they wish to follow. Developing talent from within is a less risky approach, as you are promoting people you already know and who have spent time in the organisation. Taking on new external staff always carries a natural element of risk as to how they will ultimately fit in. Formal succession planning not only helps the organisation to be prepared for future staff fluctuations and its own developments, it also heightens individual employee participation.

TMI: That sounds like a comment on organisational management in general. Why is this argument particularly relevant for treasury?

CN: Treasury requires a particular skill set that people either do or do not have. A treasury team in a corporate is typically small, and all too often there is real key-person risk. In treasury it takes time to acquire certain skill sets; it takes time to get to know a number of internal and external stakeholders. Careful planning and preparation take you there. In the treasury profession it is often the case that good people leave their employers for opportunities elsewhere, as and when they are ready to make the next move. I believe that it is a loss for the organisation when such people leave for that reason, and as Group Treasurer I place great emphasis on retaining and developing talent.

TMI: How could succession planning in treasury be introduced?

CN: A good starting point, in my experience, is business continuity planning. The argument for business continuity planning is intuitively accepted by most managers, making it more than a low-priority task. Indeed, I once came across a situation where the absence of the succession plan for critical roles in treasury was commented upon during an internal audit of the treasury function. Business continuity planning starts with individuals in critical roles being given the task of identifying one or more successors who could be developed to cover for them in their absence. Again, I found that this argument is usually well received.