Elements of a Succession Plan Policy
Statement of commitment to prepare for inevitable leadership change.
Statement of commitment to assess leadership needs before beginning a search.
Plan to appoint interim leadership to ensure smooth operations and compliance with
contractual obligations.
Outline of succession procedures including:
o internal management succession to the interim position,
o time frame for making the interim appointment,
o time frame for appointing a board transition committee, and
o roles of the transition committee, e.g., communication with stakeholders, identifying
a transition management consultant, conducting an organizational assessment and
designing the search plan.
Sample Executive Succession Plan Policy
Policy Statement:
A change in executive leadership is inevitable for all organizations and can be a very challenging time.
Therefore, it is the policy of the [ORGANIZATION] to be prepared for an eventual permanent change
in leadership – either planned or unplanned – to insure the stability and accountability of the
organization until such time as new permanent leadership is identified. The board of directors shall be
responsible for implementing this policy and its related procedures.
It is also the policy of the board to assess the permanent leadership needs of the organization to help
insure the selection of a qualified and capable leader who is representative of the community, a good fit
for the organization’s mission, vision, values, goals and objectives, and who has the necessary skills for
the organization. To insure the organization’s operations are not interrupted while the board of
directors assesses the leadership needs and recruits a permanent executive officer, the board will
appoint interim executive leadership as described below. The interim chief executive officer shall
ensure that the organization continues to operate without disruption and that all organizational
commitments previously made are adequately executed, including but not limited to, loans approved,
reports due, contracts, licenses, certifications, memberships, obligations to lenders or investors of the
[ORGANIZATION], and others.
It is also the policy of the [ORGANIZATION], to develop a diverse pool of candidates and consider at
least three finalist candidates for its permanent CEO position. The [ORGANIZATION], shall
implement an external recruitment and selection process, while at the same time encouraging the
professional development and advancement of current employees. The interim CEO and any other
interested internal candidates are encouraged to submit their qualifications for review and consideration
by the transition committee according to the guidelines established for the search and recruitment
process.
Procedures for Succession:
For a temporary change in executive leadership (i.e., illness or leave of absence) refer to the
organization’s Personnel Guidebook. In the event the chief executive officer (CEO) of the
[ORGANIZATION], is no longer able to serve in this position (i.e., leaves the position permanently),
the executive committee of the board of directors shall do the following:
1. Within 5 business days appoint an interim CEO according to the following line of succession:
a. chief operating officer (COO) of [ORGANIZATION]
b. senior vice president of the parent affiliate of the [ORGANIZATION]
c. external consultant (with experience as an interim executive director)
2. Within 15 business days appoint an executive transition committee, in the event that a
permanent change in leadership is required. This committee shall be comprised of at least one
member of the executive committee and two members of the board of directors. It shall be the
responsibility of this committee to implement the following preliminary transition plan:
a. Communicate with key stakeholders regarding actions taken by the board in naming
an interim successor, appointing a transition committee, and implementing the
succession policy. The organization shall maintain a current list of key stakeholders
who must be contacted, such as lenders and investors of the [ORGANIZATION],
foundations, government agencies, and other.
b. Consider the need for consulting assistance (i.e., transition management or executive
search consultant) based on the circumstances of the transition.
c. Review the organization’s business plan and conduct a brief assessment of
organizational strengths, weaknesses, opportunities and threats to identify priority
issues that may need to be addressed during the transition process and to identify
attributes and characteristics that are important to consider in the selection of the next
permanent leader.
d. Establish a time frame and plan for the recruitment and selection process.
e. Refer to the CEO Hiring Policy and Procedures in the Personnel Guidebook for
additional procedures.
The board should use similar procedures in case of an executive transition that simultaneously involves
the chief executive officer and other key management. In such instance, the board may also consider
temporarily subcontracting some of the organizational functions from trained consultant or other
organizations.
Emergency Succession Planning: A Tool
for Preparing for the Executive Director's
Absence
ACKNOWLEDGEMENT: The model for emergency succession planning described in
this case was initially developed by Tim Wolfred for use with clients of Executive
Transition at CompassPoint Nonprofit Services in San Francisco.
Setting the Context
The following case study is based on the current experiences of
a large, complex community development organization, which we will call Success
Development. Success Development is currently being led by its founder and
executive of 25 years. It has grown during these 25 years from a two-person
organization to an organization with a budget of over $5.5 million that owns
several housing projects. It is a well-respected, effective organization.
The founder, whom we will call Gus, is close to 60 years old. He is concerned
about what might happen to the organization should he become ill or when he
decides to retire. About a year ago, he witnessed another strong, vital
organization struggle when its executive director left. Both the infighting among
staff and board and the leadership and management vacuum apparent in this
other organization heightened Gus' concerns. He noted several lessons from his
reflections on the other organization’s struggles. First, additional funding would
have helped the organization through the difficult transition to a new executive
director. Second, the board and staff needed a plan--some guidance--about what
to do when the executive was gone. Third, middle level management in the
organization needed to have a clear understanding of the key management
functions of the executive director, and further, they should have had some
training in these functions so that they could temporarily take over the operation
of the organization.
An organizational development and executive transition consultant in
collaboration with Gus suggested that an emergency succession plan might be a
good way to prepare an organization for absences of the executive without
necessarily suggesting that retirement or other absences were being planned.
Further the emergency succession plan might be a way to address all of the
issues Gus was raising. On the other hand, there was still a concern about how
the idea of emergency succession planning would be perceived by the board and
staff. As Gus asked, "Would they 'read into it' that some actual succession was
imminent or unstated." In order to help address this concern, Gus and the
consultant emphasized the importance of clarifying authority and decision-making
in the event of an unplanned absence, which is the fundamental purpose of an
emergency succession plan, to provide guidance about the unplanned absences
as outlined in right hand column of the following matrix.
Planned---------------------------Unplanned
Short Term Planned short term Unplanned short term
(sabbatical) (illness, accident)
Planned long term Unplanned long term
(disability, accident,
illness)
Long Term
What is an Emergency Succession Plan?
An emergency succession plan "ensures the continuous coverage of executive
duties critical to the ongoing operations of an organization and its services to its
clients" by outlining “policies and procedures for the temporary appointment of an
acting executive director."
There are several key components to an emergency succession plan. The plan
identifies the priority functions of the executive director of that organization.
These functions include general functions that are likely to be true for any
executive acting as the organization’s principal leader, representative and
spokesperson, and specific functions, which are unique to the particular
organization.
Second, the plan identifies what will happen in the event of a short- or long-term
absence of the director. This includes notification of the board of directors or
executive committee of the board, the process that the board of directors or
executive committee of the board begins once they are notified, the
compensation and authority of an acting executive, and provisions for hiring
assistance for longer term absences or instituting a transition and search
committee in the event of a permanent absence.
Third, the plan identifies several staff members (up to 3) who can be appointed
as acting executive director by the executive committee of the board. For
example, a deputy director may be the first choice of the executive committee,
the program director may be the second choice and the finance director may be
the third choice or the executive committee may choose to split functions among
these staff.
Fourth, the plan includes provisions for cross training those staff people who may
be appointed to acting executive director in the priority functions of the
executive. Planning for cross training and implementing the training should begin
as soon as the plan is adopted by the board. The plan may also identify those
responsible for planning and implementing cross training.
Fifth, the succession plan highlights the importance of communication with
external supporters in the event that this plan is activated. Specifically, it
identifies categories of supporters such as government contract officers,
foundation program officers, civic leaders and major donors who should be
personally notified by the board and acting executive as soon as possible.
Creating and Adopting an Emergency Succession Plan
In this case, an executive transition and organizational development consultant
met with the board and the executive committee of the board. The consultant
suggested that emergency succession planning was a best practice that they
should consider. In addition, the consultant and Gus began educating the board
about how Gus spends his time, providing a more detailed view of his daily
activities than the board had previously had. The board also began thinking
about updating their strategic plan and how functions of the executive director
might change over time.
Next, Gus, the consultant, and the deputy director drafted the emergency
succession plan for review by the executive committee. Once the executive
committee was comfortable, they approved the plan and sent it to the full board
for approval.
The plan was formally approved by the board and became part of the
organization’s policies and procedures.
Immediate/Short-Term Benefits of the Process
In this case, engaging the executive committee of the board and lead
management staff in conversations about emergency succession had several
immediate benefits. The executive committee began thinking about what they
might need in an executive in the future. This thinking about the future
energized the committee and allowed them to be creative about the future needs
and direction of the organization without the fear that a transition was imminent.
Another benefit was that the management staff of the organization indicated they
would have greater confidence in their own ability to take on executive functions
once the cross training began.
Challenges
Currently, the primary challenge to Gus' organization is implementing the cross
training plan and beginning a strategic planning process which will take into
account the potential absence of the executive director.
In terms of cross training, Gus has noted "the challenge of creating and
sustaining formal processes to institutionalize knowledge in the organization. For
'founding' executives like me, it is important that the organization value an
executive spending time to doing things that help in this institutionalization, such
as writing about history, doing more teaching, recording oral histories about
issues, etc. This is not easy to do--spending time and energy on the 'past'--when
there is so much to do for the present."
A personal challenge for the founding executive includes coming to terms with
circumstances in which he would need to let go of the organization and beginning
to explore what "letting go" might look like. Finally, there is a challenge that staff
are already overwhelmed with work and cross training is an important but
seemingly not urgent need. As such, it often gets pushed aside.
Conclusion
Despite these challenges, Gus says, "the notion of planning for 'emergencies' may
be a good way for nonprofits to force ourselves to deal seriously with unplanned
absence/loss of key staff. After all, we have insurance to cover unplanned
emergencies that affect our properties and assets. We have procedures describing
what to do in case of natural emergencies--earthquakes and fires, etc. We should
at least have systems and plans in place to deal with unplanned absences of key
staff."