- Succession Planning - It’s Not Just a Box to Check
- May 29, 2014
- Law Firm: McMahon Berger A Professional Corporation - Collinsville Office
The more we represent employers and their interests, the more we understand the struggles that company leaders have around succession planning. Identifying both short-term (in the case of an emergency) and long-term successors (in the context of strategic planning and as part of good governance) is a challenging process that both the Board of Directors and the leader must engage in so as to provide for the continued viability of the organization.
Succession planning takes multiple forms. For example, McMahon Berger represents numerous non-profits in a myriad of different ways. As part of our services, we sometimes help non-profits with governance issues. One of the core governance issues for non-profits is succession planning. Research suggests that one of the largest challenges facing non-profits in the coming years is the succession from incumbents to new leaders who will be faced with tightening wallets, greater scrutiny from donors, and the need to demonstrate program success through data. Succession planning for non-profits requires outside of the box thinking - sometimes its clear that the CEO’s successor will not be readily available, or the non-profit simply will not be able to afford the “right” person. Merger is therefore a possibility, and it should be explored in advance of the succession of a key leader.
Other companies have utilized Employee Stock Ownership Plans as a way to do succession planning. McMahon Berger has assisted several companies in recent months with ESOP transactions. An ESOP can provide a company with both a great succession plan, a way to drive employee engagement to heights not before seen, and, most importantly, provide shareholders a market for their stock as they look to sell their interest.
If you are a company leader, or serve on a Board of Directors, think seriously about the duty to plan for management and ownership succession. When done well, succession planning can be a key component of the review of the company leader by the Board, of strategic planning, and of the individual development of up and coming leaders in your company.