H&S Q&A: The Importance of Succession Planning for Not-for-Profits

The following interview with Hood & Strong Assurance and Advisory Partner Robert Raffo is excerpted from an article in the Silicon Valley Business Journal. Bob has more than three decades of public accounting experience and founded Hood & Strong’s Not-For-Profit Service Group. He currently serves as chair of the Board of Directors at the Center for Excellence in Nonprofits (CEN) in Redwood City and is an expert advisor to Hood & Strong clients on the importance of succession planning.

What is the history and current state of succession planning in your organization?

The Center for Excellence in Nonprofits recently went through a transition with our CEO, and the idea of succession planning came from her. We were very fortunate because when she hired directors, she hired people that she would share her responsibilities with so they knew exactly how the organization ran. When our CEO did need to transition out, the succession plan was implemented. Even though it was created for an emergency situation, it was something that was able to be put into place for a permanent transition.

Our board also has a succession plan in place. Every year we have a board survey and every other year we have board interviews. We do this with the idea of making sure we have future committee chairs and future officers identified.

What was involved in CEN’s successful transition process between outgoing CEO and the new CEO?

At the end of March, the CEO notified me as board chair that she was going to be leaving for personal reasons. I notified the executive committee of our board and we met formally with the CEO to discuss certain issues. We then had a board meeting and announced to the board that the CEO was transitioning out. At that point, the board discussed the most effective way of dealing with the transition, which was to set up a transition committee that met with the CEO. Together we drafted a job description for the CEO position based on where the organization is today and business forecasts three years from now.

There was some division on the board between whether to do an internal or an external search. We decided to start internally. We talked to the directors in the organization and two of them had been identified as potential successors to the CEO in our emergency plan. One of the individuals rose to the level of interest and ability. We determined that the emergency plan we had in place was going to work and the idea was to see if that interim successor wanted to take on the role full time, which she did.

The new CEO took over on August 1, so it was a very nice transition period. Because there was crossover between the outgoing CEO and the  successor, the two of them started working together very closely. Plus, I was already meeting with the existing CEO on a weekly basis. When the new CEO was identified, she joined our meetings so that on August 1 it was a very easy and seamless transition into that CEO role.

How did the CEN board communicate with staff and donors on the change of leadership?

The transition committee prepared a timeline for everything that had to occur during the transition, including communication to staff and donors. We were very careful about the order of all of this because we had a major event coming up for the organization and we did not want the emphasis to be on the CEO transition.

Prior to the event, once we had chosen the new CEO, we  had meetings with the staff and informed them of the changes. It was a very smooth transition. We then notified certain major donors. The outgoing CEO and the new CEO met with these donors one-on-one so they were aware of what was happening and knew the person who would be taking the reins. At the end of the event, we had a little teaser about more news coming from CEN in the next week. During that week we met with the rest of our donors and then made the public announcement.

We positioned the transition as a strength for the organization, and made it clear that we had a plan in place. There was a lot of discussion about how and when we were going to communicate this transition to all parties involved, including staff. The board was concerned that if donors, staff or constituents heard through the grapevine and not through a formal announcement, the transition would be received poorly. We gave a lot of thought to timelines. Our transition team did a great job in outlining all of that.

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