Six Things Boards Need to Know About Succession Planning

The two most feared words in any nonprofit boardroom are “search committee.”

Boards bemoan having to replace a chief executive. The time, energy, emotion, risk, and cost associated with a transition cannot be understated.

An executive search may occur for a variety of reasons. It could be initiated because of a planned departure, such as the retirement of a beloved leader, or because of an unplanned and unexpected issue. In either scenario, the board is faced with choosing a new leader — whether they are ready to do so or not.

Boards don’t want to even hint at the potential need for a search and chief executives are worried about possible rumors — internal and external — that they may be leaving. It’s no surprise, then, that when succession planning is elevated as an organizational need, boards and chief executives are often hesitant to engage.

The nonprofit sector is currently facing record levels of departures due to retirements and the burnout related to the pandemic. Therefore, boards and the nonprofits they serve must be prepared for any potential transition scenario they may face. In this article, I offer six things to know about succession planning to help build your organization’s capacity and preparedness. I hope it reframes succession planning as a board-led process that contributes to positive organizational health and impact.

First, succession planning is not synonymous with search. Succession planning is best done when leadership is stable and as an extension of strategic planning.

It is far better to make organizational decisions without the pressure of a current or pending search because when that happens, emotions like anxiety and fear often trump rational thinking. In a planning process, the board can debate scenarios and structure — such as how much authority the search committee will be given or what leadership attributes and skills are needed in the future — without the stress of a timeline or candidate pool.

Second, succession planning is a board responsibility. It is a facet of good board governance and not a task on a chief executive’s to-do list.

A board chair once told me that during each chief executive performance review, the board told the CEO that she had to create a succession plan. When the board chair realized it was not a task to be assigned to the chief, the chair presented the full board with their role in this work and created a subcommittee to work with the chief executive and our team to assess and craft a plan. The resulting outcome was new levels of understanding, awareness, and engagement.

Third, succession planning should include candidate identification, but not selection. No individual should be promised the chief executive role as that ties the hands of the future board with a decision that they may or may not agree with when the time comes.

A candidate may want the job today, and the board may think the candidate is the best fit today, but the future is not now. Internal and external variables can dramatically change organizational context and a promise made may not be the best decision to be a promise kept. On the flip side, while candidate selection should not occur during succession planning, neither should rejection. Any potential candidate is just that — potential. Telling a candidate that they “wouldn’t make the cut” or “aren’t a likely CEO” not only robs the future board of that decision but could demoralize a candidate and their aspirations.

Fourth, pay attention to age, race, gender, sexual orientation, and other factors that add layers of complexity to leadership and transitions. Age-related biases are often the most forefront in terms of succession planning because of the assumption that leaders are at “retirement age.”

There are many chief executives in their 60s who love their work, are successful in their roles, and are not yet ready to retire. Their hesitance to engage in succession planning is born out of real concerns for what the planning process might telegraph to donors, staff members, and stakeholders. There are highly effective leaders who serve well into their 70s and we should not place conventional wisdom timeframes on their tenure.

We must also encourage boards to not look for a carbon copy of the current leader in the next hire. The future leader may be a woman or a young professional or a person of color or a member of the LGBTQ community. Boards must be open to candidates who do not fit the mold of what was.

Fifth, succession planning is not just for large organizations with big budgets — it can be, and should be, applied to all sizes and sectors. Please don’t think that succession planning is only the work of hospitals, universities, museums, and large social service agencies.

Every nonprofit that has professional staff should have a plan in place for the leadership needs of tomorrow. Every nonprofit board should understand the organization and the chief executive role well enough that they can successfully manage a search when needed. When organizations are not prepared, their boards often misrepresent the role in interviews because they are communicating perceptions and not reality. When a chief executive tells me, “the job I interviewed for is not the job I have,” then I know that the board was not ready or able to manage the work of the transition.

Lastly, if your organization does nothing else, create an emergency plan. Diagnoses and accidents happen. Sometimes chief executive transitions are because of unforeseen and sudden circumstances.

If the chief executive is incapacitated, who will keep the organization running? The board and senior staff must have an emergency plan to maintain the continuity of business operations. A crisis is not the moment to determine who the acting chief executive should be or figure out where the usernames and passwords are stored. Do that work when leadership is stable and the current chief executive can inform the emergency preparedness. When you do, the organization will be ready for whatever may come.

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