How Can Boards Grow Nonprofits Through Succession Planning?

How Can Boards Grow Nonprofits Through Succession Planning?

Board Members Bring a Culture of Succession to Nonprofit Organizations


Originally published in the Nonprofit Collaborative of Southern California (NPC) ebook, “What Every Board Member Needs to Know about Leading a Nonprofit”


By Randy Brinson


In many organizations, the term “succession planning” means figuring out how to respond to a future vacancy in the chief executive position.


At Third Sector Company, our definition is more fundamental: it’s about growing people in their service to the community. Succession planning supports people and fosters leadership continuity throughout the organization, thereby sustaining the advancement of its cause. This work isn’t confined to periods of executive transition; it’s ongoing.


Succession planning should be embedded in the organization’s culture.


Succession planning isn’t just for the executive director role; it’s valuable for any senior position where a vacancy could pose a critical threat to your cause. But don’t stop at the senior level.


An organizational culture that supports the growth of all staff is extremely powerful. Not only can this help your teams execute more effectively, it also sends a positive message about how you value their contributions, and helps reduce turnover throughout the organization. Finally, succession planning is not just for paid positions.


Every nonprofit relies heavily on volunteers, starting with their board. The most effective boards are those with effective board leaders, and intentional practices that help volunteers move through the leadership pipeline make all the difference in the world.


What does a comprehensive succession plan look like? We suggest focusing on the following components:


1. A clearly stated definition of what “Succession Planning” means to your organization.


Informed by facilitated discussions, this section declares how your nonprofit values people while stating a clear understanding of what succession planning is at your organization and how it is essential to advancing the cause.


We strongly recommend that you carve out special time for this process, such as in a retreat setting. Keep in mind that succession planning discussions can be sensitive for the people involved because succession implies change, and that can feel threatening. The goal is to foster a culture that values the concept of leadership continuity throughout the organization.


2. Strategies for managing unexpected vacancies in key leadership positions.


This section should read like an “In Case of Emergency” manual to minimize disruption when unexpected leadership transitions occur, whether in paid or volunteer positions.


A great way to minimize such a disruption is to pre-assemble an “Agency Information Inventory” that includes all the information a new leader would need to be effective. Banking information, notes on the organization’s legal affairs, payroll records, and the status of grants and government contracts are just some of the critical information to include. Review and update the inventory every year during your annual budget process, and make sure it is securely stored.


Download – Succession Planning Self-Assessment Guide


Use annual performance reviews to ensure job responsibilities are aligned with organizational goals, keep job descriptions up to date, and make upcoming departures less of a surprise. During the annual review process, develop contingency plans to identify who would step up to keep things running for each position if it were to be vacated unexpectedly.


A key tool for managing unexpected vacancies is professional interim leadership. Rather than rushing to fill a vacant chief executive position, hire a professional interim executive director to pave the way for your next permanent leader. The best interim leaders are capacity builders, and they understand their primary purpose is to prepare the organization for success with its next leader.


3. A set of board-approved policies specific to leadership succession and transitions.


We recommend you adopt several policies and practices, including:


    • Chief Executive Succession Policy – This lays out the steps your board would take if the chief executive position were to become vacant for any reason.
    • Regular Compensation Reviews – Keep executive compensation up to date with the market to help retain the chief executive. And if that person leaves, know how much to budget to attract and retain the replacement.
    • Annual Executive Performance Reviews – These are most effective when they relate to organizational goals and when they focus on criteria which everybody agrees to in advance. Regular reviews align expectations and improve performance, which can increase job satisfaction and help reduce leadership turnover.
    • Board Self-Assessment – Your board has more credibility in evaluating your chief executive if it also assesses its own performance on a regular basis, looking in the mirror and asking how it can perform its governance role better.
    • Board Leader Succession – Create a “career path” to the role of Board Officer through committee leadership, mentoring, training, and term limits on officer positions.


4. An accounting of talent recruitment directives, retention strategies, and human resource practices aimed at advancing, celebrating, and respecting all people in the organization.


This section of the Succession Plan commits the organization to key human resources practices for the strategic recruitment, retention, recognition, and advancement of talent.


Examples could include information about completing annual performance reviews and board assessments, professional and board development strategies, whistleblower protection, and a conflict resolution process, among others. For many organizations, an employee handbook and volunteer handbook document the content of this essential component.


5. Specific strategies to grow and advance the pipeline of talent needed to achieve the goals in the strategic plan.


This section makes a formal link between the organization’s overall strategy and the role that succession planning has in assuring the strategic plan is adequately resourced with both financial and human capital.


There’s a lot here; where to begin?


Every nonprofit is different, so the best way to ease into succession planning is to start where it makes the most sense for your organization. Since leadership continuity is an ongoing process, you can begin with any of these five components.


Be patient. Your goal is to work through all five of them eventually, but you can take them in whatever order you think best.


Remember, succession planning is much more than how to fill a vacancy at the top of the organization. It’s about organizational sustainability and safeguarding the future advancement of your cause. And it’s most effective when it fosters talent development and leadership continuity throughout the organization.


Randy Brinson is Third Sector Company’s Senior Strategist for Board and Executive Leadership Development. Certified in nonprofit board consulting (BoardSource) and leadership succession planning (Third Sector Company), Randy is a trusted partner in chief executive searches and leads governance trainings, board retreats and strategic planning activities. He also has interim leadership experience and is passionate about helping organizations build capacity to better serve their missions. Connect with Randy on LinkedIn.