Note: This is the eighth of 11 blogs featuring practical wisdom from the new ECFA Governance Toolbox Series No. 4: Succession Planning. Free to ECFA members, you can download the resource and video by clicking here.
Principle No. 8 - Plan for Plan A: Your CEO Retires
News Flash! Your CEO will retire someday, as will the senior leaders reporting to the CEO. Healthy boards and healthy CEOs address these facts of life well in advance. Effective boards take time for prayer, discernment, and considering God-honoring options. The toolbox resources for “Plan for Plan A” include helpful questions so boards and CEOs can address the elephant in the room.
Example:
• “We have clear expectations and written annual goals (with annual performance reviews) for our CEO to prevent ‘coasting’ into retirement.”
• “Our CEO already has a healthy and balanced life outside of work so retirement will not be a shock to the system.”
Even if your current CEO is relatively young, effective boards help CEOs plan for their inevitable retirement. David McKenna counsels, "Succession begins before we assume a position of leadership, not when we get ready to leave it.”
In the next two blogs, we’ll discuss Plan B—your CEO resigns, and Plan C—your CEO is terminated. Given three choices, Plan A is a joy to address!
When should a CEO retire or resign? McKenna says “timing is everything” when discerning when to leave a ministry. CEOs should ask themselves, “Do I still have fire in my belly for the future of this organization?”
In The Leader’s Legacy, McKenna notes three questions from Peter Drucker:
• What needs to be done?
• Can I do it?
• Do I want to do it?
Download the Facilitator Guide and inspire a board member to address this common elephant in the room at your next board meeting. Remember: every CEO is an Interim CEO.
BOARD DISCUSSION: One retirement option for your CEO might be to launch a second part-time career (consulting, teaching, writing, etc.). Would our board be open to our CEO beginning what Bob Buford, author of Halftime, labeled “low-cost probes” into a new venture while still employed here?
DOWNLOAD: ECFA Governance Toolbox Series No. 4: Succession Planning – 11 Principles for Successful Successions: “Every CEO is an Interim CEO.” The toolbox includes
• Read-and-Engage Viewing Guide (20 pages) – photocopy for board members
• Facilitator Guide (10 pages)
• 4 short videos (4-5 minutes each)
• Additional resources and succession planning tools
MORE RESOURCES: Follow the “40 Blogs. 40 Wednesdays.” color commentaries on Lessons From the Nonprofit Boardroom. Click here.
