Dianna L. Sutton

Congratulations to Lou Hernandez on his retirement after being at the helm of Helpline for the last eighteen years. We will miss him and all that he did for our community as a nonprofit leader and public servant. We all wish him well, although I suspect a number of his colleagues may be somewhat envious as they ponder their future. Hopefully, our community is prepared for the executive transition about to occur in nonprofit leadership as more and more baby boomers reach retirement age.

Even though the Boomer generation expects to remain forever young, the clock is ticking for their time in the workforce. A 2010 survey of nearly 3,000 nonprofit executive directors revealed that nearly 10 percent were already planning their retirement, and in less than 20 years, nearly 60 percent will have retired. The impact of the great recession on retirement plans which caused charity leaders to delay their retirement may no longer be a factor as rebounds in the economy continue to boost retirement savings.

Changes that have occurred in some local organizations and the anticipated executive transitions would suggest that nonprofit leaders and boards are prepared. But the majority of nonprofit organizations do not have a written succession plan to guide them through the organizational transition and process of hiring replacements for these executives who have valued institutional memory and key personal relationships. Having a succession plan can help ease the anxiety of hiring a new CEO and provide for a smooth transition.

Just ask the leadership at Helpline about the importance of having a plan for transition. “We just took for granted that our executive director was always going to be there,” says Board Chairman Mary Lou Hoover. “We weren’t prepared for that breadth and wealth of knowledge to walk out the door. It’s important for boards to be prepared and ask the question about CEO retirement and transition,” she says.

A change in leadership can be anticipated or occur unexpectedly. A clear succession plan will guide the board whether the CEO retires or in case of an emergency departure or prolonged absence. An emergency plan for an unanticipated change should include: 1) a list of the CEO’s priority functions; 2) how an acting CEO would be appointed, trained, compensated, and level of authority; 3) the process for appointing a search committee and description of the hiring process; 4) and a communication plan for donors, grantees and the community. If change is anticipated, the current CEO can help prepare the organization for transition and assist the board in implementing a succession plan.

It is the board’s responsibility in conjunction with the CEO to develop a succession plan policy. Some of the key components in a plan to help prepare for inevitable leadership change include: 1) an assessment of leadership needs before beginning a search; 2) a plan to appoint interim leadership; 3) and an outline of succession procedures. Succession procedures include a timeframe for making an interim appointment and appointing a board transition committee. The responsibilities of the transition committee, such as communicating with stakeholders, utilizing a management consultant, conducting an organizational assessment, and developing the search plan, are also included in a succession plan.

A CEO preparing for departure can help the board appoint an acting director if there is no overlap with the incoming CEO. If possible, the CEO should spend some time helping with his or her replacement’s orientation, training and information exchange. The amount of time in a transition period varies depending on the circumstances of the CEO’s departure and how well the organization has planned in advance. If the outgoing CEO is comfortable with long-term planning, a year is optimal to allow time for a thorough search process and smooth transition according to the Council on Foundations (COF). COF also suggests that two to three weeks is usually an acceptable time frame for CEO overlap. A longer transition period may be workable provided the outgoing CEO is willing to turn over the helm. Keeping the outgoing CEO engaged in a part-time or consulting position may help the organization transition and the CEO phase into retirement if resources permit.

Succession planning is more than replacing a CEO. It’s also an opportunity to reflect on the strategic direction of the organization. “At first it was an uncomfortable process for us, but it was the right time for Lou and our organization. We took the opportunity to re-evaluate our policies and procedures by using the materials from the Leadership Success Academy. Our board is energized and committed to moving forward,” says Hoover. Dianna Sutton is a national certified fundraising executive with more than twenty years of fundraising and nonprofit management. She is currently the President and CEO of the Community Foundation of the Florida Keys. She can be contacted at dsutton@keysapp8.dca.expr.net/cffk.