Presenter Logo Here. Succession Planning Robin Kelley, CPA

Transcription

1 Presenter Logo Here Succession Planning Robin Kelley, CPA

2 Agenda Succession Planning Facts and Definition Types of Succession Plans Management and Roles Transition Planning Potential Resources 2

3 What is Succession Planning? A process to assure timely, efficient and effective continuity of organizational leadership Includes: Preparing for the unexpected Planning for the worst case scenario Succession planning is the responsibility of the Board and the CEO/Executive Director 3

4 Succession Landscape and Trends Leadership succession is a Board and leadership concern that is growing in importance: Top concerns among boards in 2013 are: Executive compensation Cyber security Regulations Leadership and succession 4

5 Why the concern? Only approximately 17% of nonprofits have a documented succession plan yet: 67% of NP executives anticipate leaving within 5 years 40% of executive transitions fail within the first 18 months Source Daring to Lead: A National Study of Executive Directors,

6 See it as an Opportunity Succession planning provides a chance to: Reassess current practices Revisit mission/vision/direction Re-examine roles of the CEO, Board and other key management positions Redirect the focus on the position, not the person 6

7 Succession Planning Goals/Steps 1. Define the role of the Board and the CEO 2. Develop a leadership profile that describes the current and future leadership competency requirements for CEO and executive team leadership roles 3. Assess the potential and readiness of each candidate to assume the role 7

8 Succession Planning Goals/Steps (cont.) 4. Prepare individual leadership development plans and a team development strategy 5. Develop a succession plan for the CEO and key managers that defines their development requirements and timing of movement to new or expanded roles. 6. Document and monitor! 8

9 Features of an Effective Succession Strategy Assessment Based The succession and development plan is based on a critical review of current capabilities in the context of current and future role requirements. (often includes a SWOT analysis) Integrated Approach Topics addressed in the succession plan encompass future business requirements, potential market expansion, operational issues, as well as development opportunities. (Clarifying the organization s direction) Positive Orientation The assessment and development process is viewed as a skill development, not a remedial process. As such, it builds on the strengths of the individual and the position. 9

10 Features of an Effective Succession Strategy (cont.) Focused Talent Planning Immediate opportunities to build leadership skills are addressed in the context of a long-range plan. Collaborative The overall approach is prepared in a collaborative manner with the Board and is customized to the needs of all stakeholders (funding sources, investors, community supporters, etc). Strategic Alignment The resulting succession plan and development objectives are grounded in the future direction of the company. As important, the leadership plan is aligned with the governance, strategic, and operational needs of the company. 10

11 Succession Planning Phases Define Business Challenges Develop CEO Success Profile Assess Candidates Succession Strategy Development Plan Program Administration 11

12 Helpful Documentation Make sure you have a document that notes or indicates where to find: Key nonprofit status documents such as IRS determination letter, Form 1023, Corporate Seal Financial Information such as EIN, Form 990s/PCs, Exemption certificates, critical financial records 12

13 Helpful Documentation (cont.) Names, Account Numbers and contact info for the following: Banks Insurance Legal representatives HR Facilities Investments 13

14 Steps to Take During an Emergency Transition Convene the Board Decide upon Acting Executive and clarify role Establish a Board Transition Committee Communicate the plan and timeline for replacement to the Organization Review security issues and signatories Reach out to funding sources, supporters, etc. 14

15 Transition Management Steps should include: Defining the qualities and qualifications desired in the new executive and Identifying and passing on key relationships Strengthening key functions Developing a search plan Training and development that will be needed 15

16 Transition Management (cont.) Procedures for conducting interviews and checking references (as well as CORI checks, etc. as required by inhouse policies Board mentors for new CEO Develop monitoring systems Plan for familiarizing new CEO with strategic plan, mission/vision 16

17 Transition Management (cont.) A process to transfer: Constituent relationships Network contacts Administrative talents Advisory contacts 17

18 A goal without a plan is just a wish. Antoine de Saint-Exupéry 18

19 Potential Pitfalls Lack of documentation Rushing the transition Looking back look to what you want the organization to be, not what it is today Ignoring outgoing CEO/leaving them out of the loop Keeping staff informed 19

20 Potential Resources Staying Engaged, Stepping Up: Succession Planning & Executive Transition Management for Nonprofit Boards of Directors (Annie E. Casey Foundation) Nonprofit Executive Succession-Planning Toolkit (Federal Reserve Bank of Kansas City, Denver, Oklahoma City, Omaha) Executive-Succession-Planning-Toolkit.pdf Foundation Center s Resource List - National Council of Nonprofits ESC Succession Planning Handouts 20

21 Questions? Robin Kelley, CPA, Partner Alexander Aronson Finning CPAs