Insights // Spring 2022 4
HBK Nonprofit Solutions
GOVERNANCE
photo by Brooke Lark for Unsplash
Leadership Changes: Crisis or Opportunity? By Kathleen Clayton, CPA PRINCIPAL | CO-NATIONAL DIRECTOR, HBK NONPROFIT SOLUTIONS GROUP
E
veryone is talking about the “great resignation,” many calling
it the “great quit.” Unfortunately, exempt organizations haven’t been exempted from the trend. The Canby (Oregon) Area Chamber of Commerce’s widely respected Executive Director Kyle Lang announced his resignation in January 2022, saying, “The last two years have taught me a lot about resilience, about the power of staying limber and loose and able to adapt in crises.” Nonprofit Quarterly has reported the average term for small and mid-sized nonprofit organization executive directors is six years. Many say the pandemic will only hasten leadership departures and retirements. A leadership transition may come as a surprise or as part of a long-term plan. In any case, the job of the board is to move swiftly to make the transition in a smooth and controlled manner. Ideally, the departure of a leader, whether a CEO, executive director, COO, CFO, or other management team leader, should be managed by an existing succession plan. In writing for the Nonprofit Risk Management Center, contributors Melanie Lockwood Herman and
Erin Gloeckner identify succession planning as “a critical risk management issue for every board … a planning process that will ensure the health of your nonprofit during and after a leadership change.” Large and small nonprofits often have some form of a strategic plan, and a best practice is to include succession planning for the CEO and other organization leaders in that plan. Yet fewer than half of nonprofits actually have documented succession plans. Why? Perhaps
The average term for small and midsized nonprofit organization executive directors is six years. Many say the pandemic will only hasten leadership departures and retirements. because the board fears saying to its valuable CEO or executive director, “We’re going to talk about a succession plan for you.” Best-practice strategic planning lessens this anxiety by focusing succession planning not only on one position like the CEO or executive director but on all the management team and the board. Experts advise that any succession plan is better than none, but multiple plans should be developed based on the circumstances
surrounding the leader’s departure. The transition process differs depending on the reason behind the departure, whether it is prompted by an emergency, termination, extended medical leave, resignation, planned retirement, or another reason. The organization should develop transition plans for all leadership positions and all reasons for departures.
The Planned Departure The planned departure allows for a thoughtful process of saying good-bye to one leader and welcoming a new leader. The entire process should be grounded in keeping the mission at the forefront of all decisions. The governance documents should be reviewed for board policies regarding the approved transition process, assuming there is one. Given that the hiring of a CEO or executive director often takes six months or longer, a timeline for the transition should be outlined and documented, and a transition team formed to manage the process. It is vital to understand the roles and responsibilities of the outgoing leader. A detailed position description may already be part of the leader’s annual review. Is it complete? Has it changed recently? Is
