Friday, March 28, 2014

Embed Succession Planning!

In a brilliant new governance board, Boards That Lead, the co-authors devote an entire chapter to CEO succession, which they call “The Ultimate Decision.”

When I think of an “ultimate” decision for a Christ-centered board, I’m thinking about giving God the glory—and ensuring that our fork-in-the-road decisions are guided by a spiritual discernment process, grounded in Kingdom values with eternity in view.

Yet certainly one of those big decisions is about CEO succession.  Even the book’s subtitle is a helpful guide for board members:
“When to Take Charge,
When to Partner, and
When to Stay Out of the Way.”

Warning boards that “nothing can fully make up for the choice of a wrong CEO,” the three co-authors, Ram Charan, Dennis Carey, and Michael Useem present an insightful list—and color commentary—on “Ten Principles for Finding the Right CEO.”  

This list in Chapter 6 is just one of 18 practical checklists from these experienced governance gurus who work on the for-profit side. Here are their 10 points:
   1. People set strategy.
   2. Implement a CEO and successor evaluation methodology.
   3. Include in the CEO’s evaluation an assessment of how well the company [ministry] is building a succession plan for the next generation of company leaders.
   4. Place the board leader [board chair, in nonprofit circles] in charge of the succession process.
   5. Retain a high-performing chief executive, but also work to keep capable successors.
   6. Seek candid comparative data on inside CEO candidates from those who have worked with all of them. (Here they reference a 450-degree assessment.)
   7. Make direct contact with both sources and candidates to verify information.
   8. Review outside consultants carefully to prevent conflicts of interest.
   9. Maintain confidentiality.
   10. Embed succession planning in corporate culture.

At your next board meeting, ask “What would it look like for us to embed succession planning in our culture?” And you’ll need to address the obvious next question: “What board chair, or board member, or search committee has time to thoroughly meet these high expectations?” 

My answer: That’s why I encourage people serving on Christ-centered boards to ask themselves two questions: 
     1. Is my calling crystal clear? Has God called me to serve on this board—and is that calling affirmed by my spouse (if married) and perhaps even my organization (if not retired)? This will take big doses of time, thought and prayer!
     2. And to engage deeply and effectively as a board member/steward of God’s work, have I limited my board service to just one or two boards (until retired)?

The Christ-centered board, of course, will add to this above list of 10 principles. For example, David L. McKenna’s excellent book, Stewards of a Sacred Trust: CEO Selection, Transition and Development for Boards of Christ-centered Organizations (published by ECFA Press), reminds us of the holy opportunity and duty for Christ-centered boards:
CEO selection
is a sacred trust.

Are you ready?

QUESTIONS: If tomorrow, your current CEO gave you a 60-day resignation notice, is your board prepared for the succession process? Who should read these two books—and recommend next steps at our next board meeting?

No comments:

Post a Comment