With a debilitating credit crisis and global economic slowdown in full swing, good corporate governance has become critical for any successful organisation. The importance of finding the right candidate to fulfil demands for best practice has never been more vital. For their part, in-house and external human resources and recruitment specialists must demonstrate an understanding of the role they play in a company's corporate governance practices through their succession-planning strategies. They must also appreciate the fallout from the financial crisis, which has only heightened the need to pick senior candidates carefully. The stakes are high. Last year, Robert Willumstad lost his job as chief executive of global insurance giant AIG after only three months, while John Walter was ousted by AT&T's directors after just seven months as president. At AT&T, the board had to give Mr Walter US$26 million to leave, taken right out of the pockets of the company's shareholders. According to Steve Watson, international chairman of executive search firm Stanton Chase International, recruiters are now reconsidering how their CEO candidate of choice can protect an industry, a company, its employees and its stakeholders from scandal and corporate mismanagement. 'The CEO candidate is someone who will impact the three-to-five-year performance of a company, and enhance its revenue, profitability and stakeholder value. It's not a short-term focus on filling the position but about finding the right skill set and the right candidate who will bring added value to the stakeholders, the financial management of the company and its business effectiveness,' he said. There is no standard formula marking the right person for a senior management job but there are certain universal qualities that recruiters are seeking in either externally sourced candidates or those identified in-house as future leaders. While the specific and technical skills that a business needs are a given, integrity, mobility and cultural agility are also deemed essential qualities for those who wish to climb the career ladder to the boardroom. According to Catherine Pang, head of human resources (Asia-Pacific and Japan) for a United States listed technology company, integrity is the hardest quality to measure in a candidate. 'For in-house candidates, you can only identify it over time and by opening up the person to 360-degree feedback internally and externally,' she said. 'But if someone is to have any credibility around their leadership, we need to know how much of what they say is just talk, and how much they put into action. When they ask their employees to do certain things, do they set good examples? It's only through a lengthy process and getting feedback over time that we can begin to understand whether someone can command the kind of respect from the organisation that we need them to.' Pushing such internal candidates to demonstrate their abilities and potential is key to the building up of a depth of talent in the pipeline. Ms Pang said that awarding them stretched assignments, critical jobs, learning enhancement plans, diverse assignments, treatment and retention plans, 360-degree feedback and executive mentors and coaches were all important to their development towards the top jobs. 'In terms of succession planning, I partner top management to identify, on an annual basis, candidates in middle management who have the potential to be promoted to the rank of director and above,' she said. 'There's no specific number of candidates in mind every year, but it is an exercise that we do in order to understand our internal capability and the employees' aspirations. 'It is a heavy maintenance exercise. You really need the commitment and the mentorship of the senior people for the next generation of leaders to come up to speed or to have the visibility that they need.' New York listed real estate services company Jones Lang LaSalle has several different talent development programmes at global, regional and country levels. Elsie Hui, the company's human resources director for North Asia, said that, with its global headquarters in Chicago and regional headquarters in London and Singapore, the company could ensure that its high-potential individuals had the opportunity to move around the global network to gain wide exposure, learn leading practices and deepen client relationships. The company's global staff exchange programme is between the three regions in which it operates: Europe, Asia and the Americas. An exchange programme at regional level also sees individuals placed on rotations between northern, southern, eastern and western parts of the Asia-Pacific. 'People will be doing things that they have never done before and through this exercise they will be able to walk out of their comfort zone, embrace diversity, be more creative and adapt to new learning, all of which help in developing their talent moving forward,' Ms Hui said. 'On a country level, people work across teams that may be in different countries. It is through this highly collaborative working culture that people hone their exposure.' These kind of expatriate assignments and programmes of global exposure can also include participation in noteworthy industry events, perhaps even presenting papers at conferences. Together, all these increase the candidates' confidence and, more importantly, raise their visibility with management and the board. In fact, for succession planning to work, the board, senior management, human resource heads and any external search firms involved must be committed to the same goals when hiring senior managers and also in identifying and working with possible successors within a company, according to Robert Grandy, regional market leader of Korn/Ferry International's global financial market in Asia-Pacific. He said, for example, that an increased focus on corporate governance in the wake of so many CEO failures would probably see boards of directors become more heavy-handed in ensuring that their companies were hiring the right candidates as potential leaders. 'Given the problems that we've been seeing, boards will likely make management changes more quickly and be prepared to move on a senior executive who is not performing,' Mr Grandy said. 'They will probably spend much more time as boards assessing and working with maybe the top 10, 20 or 40 candidates below the CEO to make sure they know each one of them and that they are recruiting the right people into those positions.' This kind of 'getting to know you' strategy is particularly important to succession planning because most companies prefer to use internal candidates to fill senior vacancies. If an organisation can prove to its employees that it has successful cases where people have been promoted through the ranks to the top job, then there is a greater chance that employees with greater potential will stay with the organisation. Ms Pang said that promoting from inside was as much a retention programme as a way of appointing someone already familiar with clients, business practices and corporate culture. 'If you give too many opportunities to external hires, employees will question the point of sticking with the organisation. They will ask why they should respect the kind of assignments or development opportunities placed in front of them if going through these exercises is not going to help them gain a position at a higher rank,' she said. Indeed, cultivating an in-house pipeline of high-potential candidates is preferred by some corporations to bringing in external candidates in succession planning, according to Ms Hui. 'It is important that our senior leadership understands our culture, our business and our clients. Most of our senior leaders, therefore, are homegrown talent, with a smaller percentage of acquired talent,' she said. 'From experience, a business line head who works his or her way up picks up the role faster because he or she already has the support networks, good relationships with our clients, knows what we value most and how we work. 'We are keen to develop people so that we have leaders in the pipeline. When the opportunities come, we will be able to grasp them. It's all about having leaders at all levels.'