Replacing a Nonprofit CEO: Boards and Succession Planning

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By Guest Blogger Tom Okarma[1]

Replacing a CEO ranks among a nonprofit board’s highest and sometimes most leadership-intensive responsibilities. While such transition presents huge opportunities, it can also be disruptive and filled with emotion, politicking, and hurt feelings.   Sooner or later every nonprofit will likely faces this challenge.  How it is managed will have repercussions for years to come.  Several important overarching considerations are well worth proactive attention and evaluation, as follows.

  • The board alone owns this duty and must take charge of it.
    • Once the board learns the CEO plans to leave, the leadership should work to establish a mutually acceptable separation date. Once set, that date should be considered firm and the board should stick with it. The timetable for everything that must be done to replace the CEO should be established from that date backwards.
    • It is best to start the process of replacing a CEO early, in fact, as soon as possible. It may take many months to identify and hire a suitable replacement and there are many steps and unknowns along the way. To avoid rushing into a poor decision, it is best to build ample time into the schedule.
    • The entire board should be involved in this important task, with a search committee leading the effort and being responsible to the board for carrying out the day-to-day steps of the process. The search committee should report its progress frequently to the board, usually during executive session.
    • Confidentiality should be maintained throughout the process. People’s reputations and careers are involved, not to mention the nonprofit’s own reputation in the community.  One person might serve as the spokesman for the board’s efforts whenever people invariably ask how the search is going.
    • Whenever possible, it is usually best to hire from within, so the board should review its internal leadership pipeline for viable candidates first.  If none exist, then building internal leadership bench strength is something that should be addressed in the near future.
    • Ideally, the nonprofit already has one succession plan in place—the emergency succession plan—to be used in the event of a tragic event occurring. That plan may offer solid ideas on the replacement process as well.
  • Understand and recruit towards the nonprofit’s future direction.
    • A board should look forward and not backward when hiring a new leader.  It should first review (or update) its strategic plan and then build a leadership profile listing a combination of the most desirable skill sets, experiences, relationships, that complement the nonprofit’s strategic plan and future direction.
    • The board should seek appropriate wisdom regarding  the proposed new leader’s profile.  It is human nature to try and replace the exiting leader with someone comfortable, or similar in style and skills, or with the next internal person in line. While they may appear to be ideal candidates, it is also possible they are not a good fit for the kind of leadership the nonprofit needs going forward.  Thoughtful consideration may well lead to some fine-tuning.
  • Support and engage the outgoing leader.
    • The outgoing leader hopefully has led well; it is now time for he or she to leave well.  Having this discussion early on can help things go smoothly later. 
    • The board may want to debrief the outgoing leader, not unlike an exit interview to obtain a ground level and frank assessment of the nonprofit that the board can use when crafting the new leader’s profile.
    • It is usually best to keep the outgoing leader entirely out of the replacement process. This may be met with some resistance but is actually a huge gift. The leader may well be swamped with requests from friends and nonprofit colleagues either to put in a good word to the search committee for them, or in seeking inside information on the interview process, etc.  Keeping him or her out of the process gets the leader “off the hook” and keeps them from being put in the middle of the search effort.  It also allows him or her to focus on duties surrounding their “leaving well”.
    • It is a good idea to periodically check-in with the leader to see how he or she is doing during this period, which may be a very personal and emotional time. The leader is still the face of the organization and needs to stay focused.
    • The board should plan an appropriate celebration to recognize the leader and all the nonprofit’s accomplishments.
    • The board and the new leader should ask the outgoing leader to clean up or update any confusing procedures or complicated manuals before leaving. This gives the next leader time to step in and learn the ropes. The same goes with any long-standing projects. Can they be wrapped up before he or she leaves?
  • Prepare the nonprofit for its next chapter.
    • Change is coming, and not everyone may be ready for it.  The nonprofit culture must be protected and key staff, leaders, and volunteers may need some special handling.  It is important to identify what, and whom, must be protected and, in the case of key individuals, “re-recruited” so they stay onboard. Periodically walking around the offices may reveal how well this is going.
    • Feedback is always important but especially during transition. Insure services are still satisfactorily being delivered and that the nonprofit continues to operate as normal as possible.
  • Develop a plan to help transition in the new leader.
    • Since the new leader will face many new challenges and probably have a lot of questions the board chair should offer to be available to the new leader, as needed, to help navigate those first few months. Giving the new leader a safe place to ask questions and receive feedback will help speed up the orientation process.
    • The nonprofit’s key staff should understand they are expected to play an important role in helping make this leadership transition successful. This should be made clear early on, even before the new leader is hired.
    • It might even be a good idea to include some key staff in the candidate interview process. It should be made clear, however, that they would not have ultimate veto or hiring power, but that their feedback would factor into the decision.   
    • To help the new leader start off on the right foot, a board should provide a “deep dive” session or two to immerse the new leader in the details of the nonprofit’s Mission, Vision, Values, ongoing internal and eternal issues, informal protocols, key upcoming events, etc.
    • Someone should be responsible to introduce the new leader to all external key stakeholders of the nonprofit. Many important relationships need to be cultivated and transitioned so the sooner, the better.
    • It is reasonable for a board to set certain expectations for the new leader and ask for periodic updates over the upcoming 30, 60, 90 days.
    • Consider asking the new leader to assess the nonprofit and its people, and to make any observations and recommendations within the first 45 to 60 days.

Some forethought and commonsense will make this important transition a success, but it will take time. The payoff is a nonprofit that continues to serve its clients without missing a step.