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Succession Planning

A change in executive leadership is inevitable for all organizations and can be a very challenging time. A succession plan policy is a tool to help an organization be prepared for planned or unplanned absences of the director, clarifying authority and decision-making, and thereby maintaining accountability and ensuring stability.

The following sections outline the key components of succession plan policy and provide a brief sample policy.  For practical advice on how to develop a policy, see the July 2003 issue of TransitionLeader, which includes a case study on emergency succession planning.

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:

  • internal management succession to the interim position,

  • time frame for making the interim appointment,

  • time frame for appointing a board transition committee, and

  • 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:

1. Within 5 business days appoint an interim CEO according to the following line of succession:
   1. chief operating officer (COO) of [ORGANIZATION]
   2. senior vice president of the parent affiliate of the [ORGANIZATION]
   3. 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:
   1. 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.
   2. Consider the need for consulting assistance (i.e., transition management or executive search consultant) based on the circumstances of the transition.
   3. 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.
   4. Establish a time frame and plan for the recruitment and selection process.
   5. 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.

"A succession plan policy is a tool to help an organization be prepared for planned or unplanned absences of the director."

Just Published!
Leader Development & Emergency Succession Planning
An Organizational Planning Workbook and CD-ROM

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8/25/05