Insurance

WAICA aligns insurers with management transition, succession plan

Igbiti

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Chuks Udo Okonta

To ensure insurance firms outlived the founders and continue to offer unique services to policyholders, the leadership of West African Insurance Companies Association (WAICA) has taken the bold step to align underwriters with management transitions and succession plans strategies.

The association in its ongoing 2022 Annual Educational Conference, themed: ‘Management Transitions and Succession Plans in Corporate Governance, the Theory & Reality in the West African Insurance Industry”, in Monrovia, Liberia, has paraded experts to educate insurers drawn from West Africa, on how to keep their companies afoot by instituting robust succession plans and management transitions.

The President, Chartered Insurance Institute of Nigeria (CIIN) Edwin Igbiti, who is one of the theme paper presenters, noted that it is important to document and formalise succession plans once details are clarified, adding that typically, these plans account for the five to 10 years business strategy and roadmap for the new/incoming executive prior to the change in leadership.

According to him, Chief Executive Officers (CEOs) must have a team of top professionals who have experience aiding other businesses in developing succession plans . He added that key member of the board could also be identified to play this role.

He submitted that from strategy point of view, passing on leadership roles to an employee or group of employees, ensures that businesses continue to run smoothly.

“Research shows that the highly successful enduring companies develop, promote, and carefully select managerial talent from inside the company to a greater degree than less successful companies. They do this as a key step to preserving the core.

“Therefore, it is the quality of leadership that mostly separates these types of companies from less successful ones. It is the continuity of quality of leadership that matters – continuity that preserves the core. Walt Disney captures it perfectly when he said: “You can dream, create, design and build the most wonderful place in the world, but it requires people to make the dream a reality.”This is a contested rationale in many circles but simply put; it is difficult to become and remain a highly successful enduring company by hiring top management from outside the organisation.

“Equally important, there is absolutely no inconsistency between promoting from within and stimulating change,” Igbiti posited.

He said it is imperative that companies instil efficient management development processes and long-range succession planning to ensure a smooth transition from one generation to the next.

“Interestingly, the facts show that nearly all the key architects in the successful enduring companies remained in office for long periods of time (at least in the US), so few of the companies faced actual succession while still young and small.

“Nonetheless, many of them were planning for succession long before the actual moment of succession.If you are a small business, this indicates taking a very long-term view,” he submitted.

Igbiti posited that the entrepreneurial model of building a company around a great idea, growing quickly, cashing out and passing the company off to outside professional managers would probably not produce the next world class organisation, stressing that as CEOs must dream of a company that will live beyond them or the founder.

He canvassed that to properly assess all the necessary aspects required for succession planning, an organisation needs to have a firm grasp on the current state of its business and its operations.

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