Building the Leadership Bench Succession Planning With Board and - - PowerPoint PPT Presentation

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Building the Leadership Bench Succession Planning With Board and - - PowerPoint PPT Presentation

Oct 24, 2022 221 likes •639 views

Building the Leadership Bench Succession Planning With Board and Staff 1 OBJECTIVES OF SESSION Understand why succession planning is required Discuss why boards matter, especially for successful successions, and how they should

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Building the Leadership Bench

Succession Planning With Board and Staff

1

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2

  • Understand why succession planning is required
  • Discuss why boards matter, especially for successful

successions, and how they should partner with the CEO-

  • ver time
  • Learn research based practices for successions including

board-key staff-CEO

OBJECTIVES OF SESSION

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WHAT CHARACTERISTICS DO WE LOOK FOR IN A NONPROFIT LEADER?

  • Visionary and future focused
  • Entrepreneurial spirit
  • Calculated risk takers
  • Good communicators
  • Systems thinkers
  • Creative problem solver and thinker
  • Connector- Collaborator
  • Values oriented
  • Others?
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ALLIANCE FOR NONPROFIT MANAGEMENT

DRAFT DEFINITION-SUCCESSION PLANNING

THE PROCESS OF ENSURING CONTINUITY OF EFFECTIVE LEADERSHIP FOR AN ORGANIZATION BY PREPARING FOR PLANNED AND UNPLANNED LEADER TRANSITIONS AND ADVANCING A LEADER DEVELOPMENT CULTURE.

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REQUIREMENTS

WRITTEN POLICY FOR PLANNED AND UNPLANNED LEADERSHIP TRANSITIONS AND INCLUDES STRATEGIES FOR LEADERSHIP DEVELOPMENT FOR THE BOARD, (ESPECIALLY THE CHAIR), AND FOR KEY STAFF, (ESPECIALLY THE CEO).

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CREATING AN ENVIRONMENT FOR ALL LEADERSHIP….TOOLS YOU CAN USE

  • Board and staff roles and how they

work together

  • Organizational values
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FACTS ABOUT CEO-BOARD RELATIONSHIP

  • Lack of board support or board problems “first or

second reason why nonprofit CEOs resigning in record numbers.”

Timothy Wolfred, Leadership Lost: A Study on Executive Director Tenure, March 1999

  • Several studies showing boards are increasingly

unhappy with their CEOs because they won’t share power and/or only want boards to fundraise

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MORE

  • Nearly a third of current executives (31%) have been on the

job for fewer than three years; 27% have been on the job for ten or more years

  • Performance management is a critical means of dialogue with

about success and metrics to measure

  • 45% of executives did not have a performance evaluation
  • During honeymoon phase, 1 year, 52% of execs described

themselves as very happy but only 37% identified very happy after

  • Executives only spend 20% on board-related activities and

those have higher rates of satisfaction with board performance.

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TRUST, TRANSPARENCY, COMMUNICATION, ACCOUNTABILITY ESSENTIAL FOR GOOD RELATIONSHIP

  • Shared values

– Core values of organization/leadership in alignment – Values enhance publics’ confidence – Core Values = good choices: people, programs, planning

  • Clear expectations
  • Transparent communications and decisions

– No surprises – Not an “ask for forgiveness” culture

  • Mutual respect for intent and competence
  • Learning environment

– Risk taking – Shared power – Building on assets

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ORGANIZATIONAL VALUES

  • Answers the questions:

–What drives your organization –What motivates you to move ahead –Required behavior

  • Timeless guiding principles
  • Not aspirational, but the DNA
  • No more than 5
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MAIN REASON BOARDS AND CEOS DON’T GET ALONG; DISAGREEMENT ABOUT

1. Mission 2. Core values 3. Judging success for organization and CEO 4. Who does what

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Property of The Foraker Group 2012

BOARD STAFF BALANCE =

Trust, Transparency, Communication, Accountability, Responsibility

12 5/8/2015

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IT TAKES THE TEAM TO BE SUCCESSFUL

  • The Board’s effectiveness is directly related to the

level of the CEO’s engagement with the Board.

– On average the CEO spent 20% of their time for a board who is high performing

  • Despite having exceptional professional leaders

serving on the Board, the CEO is critical to ensuring that all Board activities, including committee work, are successful.

BoardSource 2010 Nonprofit Governace Index

13

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IT TAKES COMMUNICATION…

  • 81% of nonprofit boards conduct formal, written evaluations of their CEO. An

annual performance assessment is central to a chief executive’s job satisfaction! BoardSource Nonprofit Governance Index 2012

  • Opportunity for the board and CEO to agree on what’s important.
  • Legal obligations

– The IRS asks all nonprofits to describe their process for setting chief executive compensation in Schedule O of the Form 990. Performance evaluation is a part of that process.

  • It’s lonely at the top!

– With no peers and no direct supervisor, a chief executive has few

  • pportunities to obtain insight into his or her strengths, limitations, and
  • verall performance. Performance assessment provides that opportunity.
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BOARD TRANSITION PLANNING

  • Some Facts
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PERFORMANCE OF NONPROFIT BOARDS-RESEARCHED EVIDENCE

  • 56% of Boards are well informed of their legal and

governance responsibilities

  • 77% of Boards have a structured, in-person orientation
  • 60% of Boards have conducted a formal written Board

evaluation.

  • 71% of Board members make a personal contribution
  • 39% of Board are prepared “to a great extent” for

meetings

» Board Governance Index 2012

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“Single biggest reason for why nonprofit Boards are needed is that they impact nonprofit performance”

William P. Ryan, Richard P. Chait and Barbara E. Taylor, “Problem Boards or Board Problems?” The Nonprofit Quarterly, 10 2 Summer 2003

“The quality of Board performance was the only thing that consistently showed up in the studies on what makes nonprofits effective”

Daniel P. Forbes, “Measuring the Unmeasurable: Empirical Studies of Nonprofit Organization Effectiveness From 1977-1997,” Nonprofit and Voluntary Sector Quarterly, 27 2 June 1998 183-202

  • The goal: Thrive, not just survive!

THE MORE EFFECTIVE THE BOARD, THE MORE HIGH PERFORMING THE ORGANIZATION WILL BE

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BOARD SUCCESSION TOOLS

  • Board development includes
  • Strategic recruitment
  • Terms
  • Chair succession process
  • Job descriptions
  • Ongoing training
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BOARD DEVELOPMENT

  • Goal: The right people at the right time

– The board is appropriate to mission and core values – The board is focused on meeting the goals in the strategic plan, governing the

  • rganization and partnering with the CEO

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WHAT WE SEE IN ENGAGED BOARD MEMBERS TODAY:

  • Concern about the cause motive for board service.
  • Demand agency quality impact
  • Demand to make a difference

– Engage in mission in a meaningful way. – Maximize time– focus on decisions, discussion, education

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FOCUS ON BOARD COHESION AND ENGAGEMENT

  • Traditional approach: select “superstars”

– No orientation to the organization, little behavioral guidance, trustees learn by observation & osmosis

  • New approach: create a constellation

– Selection based on skills, group dynamics, commitment, comfort with consensus, and knowledge of strategy, change, &

  • rganizations
  • “Courtship before marriage”

– Use job descriptions in courtship – Committee service first if possible – Articulate mutual expectations – Clarify “unwritten” rules, norms, protocols Thanks to Richard Chait

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LIFE CYCLES OF BOARDS

  • Sustaining Stage

– Occurs when staff is added – Board begins to structure itself- talk about difference between “governance” and “management.” – Recruits more diversity to board

  • Crisis Stage

– Board struggles to define role – Board may have difficulty recruiting – Reputation of staff and board leadership critical to forward movement

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  • Governance Stage

– Board very business-like – Uses standing committees – Clear separation of governance and management – Board a mix of those serving because of the cause and for

  • ther reasons
  • Ho-Hum Stage

– Staff makes all important decisions – Board meetings ritualized – CEO sees board’s value just as fundraising – Good board members begin to leave – Some agencies get stuck

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HIGH PERFORMING BOARD

  • Board re-energized
  • Focused on strategic issues without worrying

about firewall between policymaking and management

  • Board and staff become partners
  • Board feels free to innovate
  • Roles become flexible over time
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2/12/2015

  • Purpose/values focus

– Set direction for the future (strategic/adaptive)

  • Define organization performance and impact

– Approve major policies & program initiatives – Partner for impact – Advocate for change

  • Ensure financial resiliency

– Oversee, conserve, enhance

  • Select /support/partner/evaluate CEO
  • Board self-improvement

BOARD ROLES THAT MATTER MOST

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STAFF SUCCESSION

  • Positions to consider for succession
  • CEO/ED
  • Development Director
  • Finance Director/CFO
  • Program specialist
  • Other?
  • CEO selects direct reports-Board

selects CEO

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MORE FACTS

  • Less than half of new execs stay in the job for

three years-most leave because of lack of board engagement – The rest are fired because board’s dissatisfaction

  • Less than 40% of execs currently in job see

themselves in job in 5 years

CompassPoint-”Daring to Lead”

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OTHER POSITIONS

Development Directors- – Median vacancy 6 months, 46% of

  • rganizations report longer vacancies

– Among organizations with budgets of $1 million or less, median vacancy length jumps to 12 months. – Overall, 16% of executive directors at

  • rganizations with vacant development

director positions reported vacancy lengths

  • f two or more years CompassPoint-”Under Developed”
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AND WHO CAN FIND THE RIGHT FINANCIAL STAFF?

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STAFF SUCCESSION TOOLS

  • Organization values
  • Job descriptions
  • Competitive compensation
  • Evaluation process
  • Clear boundaries-who does what
  • Engaged board
  • Appropriate staff engagement in

selection

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FIRST WHO, THEN WHAT (COLLINS)

  • Hire (recruit) the right people, don’t focus

just on the needed skill

  • Once it is understood that someone is not the

right person, ask them to leave; work to not burn bridges

  • Learn from mistakes.
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CEO SUCCESSION PLANNING

  • Board’s biggest job-selecting then maintaining

relationship with CEO

  • Board’s next biggest job-managing itself, including

seats filled with the right people, equipped for the job

  • A formal transition plan should be for expected and

unexpected transitions

  • Tools:

– Contracts, with an end date for review – Performance evaluation , each time ask “how long are you going to stay in this job?” – Board Development – Scenario planning; ready for any possibility

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KEY QUESTIONS TO CONSIDER WITH CEO TRANSITIONS

  • Is current direction the right direction?
  • What will be impact on other positions?
  • What will be impact on funding sources?
  • Budget for transition?
  • Need for professional consultation?
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PROCESS

  • Unexpected Transitions
  • Who will fill/cover duties in interim
  • If not internal, what's the strategy
  • Expected Transitions-(3-12 months notice)
  • Notification process-who knows what and

when

  • Designate committee ( for CEO transition)
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BEST PRACTICE STRATEGIES

  • Don't inform staff, funders, community too early
  • Current CEO should not anoint successor; selection is

a board responsibility

  • Current CEO only involved in on boarding of new CEO
  • Entire board makes decision, not a committee
  • Develop on boarding process for new CEO
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PROPOSED TIMELINE PLANNED CEO TRANSITION

  • Board and CEO discuss timing; every annual

evaluation

  • CEO informs board twelve months before;

board maintains confidentiality of information

  • Board develops strategy for transition process

– Committee – Budget – Support needed

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CONTINUED

  • Board notifies key funders, partners and staff

six months out

  • Begins search process

– Secure professional support-if needed – Publicizes position – Speaks to internal candidates about process

  • Board selects new candidate 1-3 months

before transition

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AND FINALLY

  • New CEO meets with exiting CEO; transfer

knowledge relationships

  • Board provides weekly support to new CEO for

at least first three months

  • Former CEO remains on call as needed basis to

answer questions for up to six months

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Property of The Foraker Group 2012

39

THE BOOK

5/8/2015

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QUESTIONS–WRAP-UP EVALUATION VIA E-MAIL

Thank YOU For more information, contact: The Foraker Group info@forakergroup.org (907) 743-1200 • toll-free (877) 834-5003 • Fax: (907) 276-5014 www.forakergroup.org