Introduction
Do all boards have succession plans? Do current board members really care about who follows them? Is it a matter of thinking, “I’ll do my best when I am here and when I’m gone someone else can take over.” Sometimes boards cannot choose their successors. However, there are times when they do. This article addresses 7 keys to successful succession planning. These relate to
- Skills
- Training
- Business Transactions
- Legal
- Succession Timetable
- Risks (Governance)
- Finances
Each of these keys is discussed below.
Skills
It is imperative that the role of the board members, board committees, and officers of the board are clearly delineated. It is also critical that the current board is complying with those descriptions, and there are internal processes which regularly check to ensure that the current board members demonstrate the skills necessary to meet the present-day demands on the board.
When you think of your own board, are you looking for ‘good’ people or does your board seek individuals who have specific competencies enabling the board to
- see the big picture
- refrain from being controlled by the CEO
- think critically and analyze all options and the associated risks
- connect strategically
- work as an effective team
- problem solve and avoid groupthink
- refrain from doing the CEO’s job for her
- plan strategically, and
- develop relevant partnerships.
If you want the best board members it is essential to ensure that, the board avoids
- choosing too many board members with the same key competencies
- appointing people who want to put their role on their resume but they do not have the time to commit to the role, or
- accepting people who have ulterior motives which will not serve the board in the long run.
The board’s role is to
a) determine what strengths it needs as a collective
b) outline when persons with certain key strengths will leave the board and look for persons with those strengths to replace them
c) outline what the value-added is for any individual who will agree to sit on the board
d) be upfront and clear about the time and personal expectations for a person who is considering accepting a position on the board, and
e) discuss and present the training options available to new members.
Training
What training programs does your board offer current board members? Is it sufficient? Is it comprehensive? Is it offered at strategic times? When you know the answers to these questions you are able to determine what your board needs to do to improve the current professional development opportunities or the modes with which professional development is offered.
Your board will know
- what it will offer when to new board members
- whether new board members will receive any mentoring from the outgoing or remaining board members,
- whether training will be offered in-house or conducted by external providers, and
- whether the new board member will be expected to perform any administrative functions such as being a signing officer, or be a negotiator.
Business Transactions
Business administration changes relate to the need to change the names on documents when board members change. Two examples would be the names on bank accounts and names of the official board representatives for specific negotiations.
Legal
Is your board expected to do background checks on new board members? Are there specific conditions under which you cannot ask a person to be a board member? Are all board members expected to
- be members of the organization?
- be citizens of the country?
- live in a specific jurisdiction?
Does a new board member have to be a specified age in order to sign contracts or other legal documents? Are there any reasons why your current board’s insurance policy would not cover a person under consideration?
The answers to these questions may narrow the pool of candidates the board can consider.
Succession Timetable
When the pool is identified, it is time to determine when the selected candidates need to be approached. To do this the board’s succession plan specifies the details of each phase in the succession process. This means outlining
- the term’s start date
- the term’s end date
- whether the person can be asked to stay on for a second term, and
- whether the person is expected to take on successive roles if he says yes to one role. For example, a person who chooses to be vice-chairperson he may be expected to accept a term as chairperson and remain on for another term as past-president.
Risks (Governance)
A potential board member may offer ‘yes-but’ scenarios when approached. An example of this would be when a member says I can accept but I may be out of the country for four months each year, or I would really like to accept this offer but I might be offered a new job elsewhere in a few months.
The current board is expected to know in advance what risks
- it can accept
- the likely ramifications if the ‘but’ becomes a reality
- it can ameliorate and who would fill in the role if this person steps aside, and
- it cannot live with because the impact would affect the effectiveness and efficiency of the board to too great an extent.
Finances
It is essential to consider the financial implications of any appointment. These factors include
- payment if the board member is paid a stipend
- costs of travel and lodgings to attend meetings
- whether the board provides electronic equipment such as a cell phone or computer
- the cost of electronic connections to attend special or regular meetings
- the amount of professional development needed to provide the person with the competencies to fulfill the expected role, and
- insurance premiums.
Final Note
Succession planning does take careful consideration. It is an item which the board needs to think through carefully and map strategically. It means that current board members have to be willing to identify the glitches in the existing methodologies and identify what makes the board a welcoming place. Board members need to feel comfortable leaving the board at the end of their term, and the new board members have to know that they can add value to the governance role and leave a positive legacy when their term is finished.
