Best Practices for Planning a Smooth CEO Succession

Best Practices for Planning a Smooth CEO Succession

As most corporate directors know, CEOs come and go. For that reason, boards must be adequately prepared to facilitate smooth transitions between leaders regardless of whether the current CEO is exiting due to a new opportunity, retirement, or because they’ve been asked to leave. Although it can be a stressful time for any company, CEO succession can be a highly strategized and monitored evolution.  Here are some of our CEO succession “best practice” suggestions:

  1. Craft a written succession plan. 

This may seem like a no brainer, but it must be said. This policy can and should include emergency plans in case of sudden death or a completely unplanned vacancy. Russell Reynolds Associates suggests, “The entire board, together with a senior human resources executive, should review the succession plan twice a year, including an examination of the relevant bylaws and succession procedures and a review of the baseline capabilities requirements for the next CEO.”

  1. Set and communicate clear time frames.

Nothing throws a company into turmoil quite like a period without clear leadership. Employees start to get antsy and worry whether the transition will have an adverse effect on their position. To avoid this unsettling time as much as possible, the board should establish clear succession time frames. As Ivey Business Journal shares, “CEO succession planning must begin immediately following the installment of a new CEO. The planning must be a constant, ongoing process that is managed as closely and attentively as any of the company’s critical business issues.”
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Higher Education Boards Move From Ceremonial to Challenging

Higher Education Boards Move From Ceremonial to Challenging

Historically speaking, many higher education boards have been viewed more as symbolic leadership and less as entities that are shaping the future of education. The trustees often play the role of donor, booster, or simply cheerleader for the university they serve. As governance demands continue to grow for all boards of directors, though, higher education boards have entered the spotlight on more than a few occasions.

Several recent reports have called for more investment from board of trustee members. In fact, the National Commission on College and University Board Governance insisted, “Boards can no longer serve as rubber stamps for university presidents.” Former Tennessee Governor (and chairman of the commission) explains, “Many meetings of trustees or regents follow the same pattern: The president gives his presentation, you have some more presentations about all the wonderful things people are doing, you have lunch, and it’s time to go home. You can get away with that when nothing is changing, but the world has changed. The boardroom needs to move from being a country club to a place where they can work.”
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Cultivating Better Boardroom Conversations

better boardroom conversations

Every board meeting is different; in fact, a meeting that’s relatively dull and discussion-less might follow a meeting comprised of contentious and heated debate. There isn’t a “right” kind of meeting, but there are some ways to help ensure that you’re getting the most out of your in-meeting conversations.

A. Don’t avoid disagreements; give them a structure.

Many individuals are conflict-averse, but the truth is that board meetings sometimes demand that two sides state their cases for different paths forward. Some of the best boardroom discussion can come from a debate-style format, but that’s the trick—the moments of disagreement should feel heavily controlled like they would in an actual debate competition. In other words, set time limits for laying out arguments. Give individuals a structure that ensures balanced speaking time. When directors feel as though they have an equal opportunity to speak, it’s easier to focus on the topic at hand rather than on potential unfairness.
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Why Nonprofit Boards Should Invest in Technology

nonprofit boards invest technologyNonprofit organizations are notorious for being slow to adopt new technology. For many, it’s simply because they operate on a hand-to-mouth budget with very little room for extra spending. For others, it’s a determined commitment to keeping overhead costs low. In the meantime, though, useful advances in technology are presenting more and more opportunities for nonprofits to grow and to thrive. It’s important that nonprofit board members be the driving force behind making these changes. Here are some reasons why we think your organization should take the plunge and invest in its technological infrastructure.

  1. You’ve got to spend money to raise money.

Yes, we’ve put a slight spin on an old adage, but we think that it’s an apt one in this instance! We know that in the nonprofit realm there can be a potentially harmful attachment the ability to report astonishingly low overhead costs. Check out this article, which explains a phenomenon called “The Nonprofit Starvation Cycle.” The article reads, “In response to pressure from funders, nonprofits settle into a ‘low pay, make do, and do without’ culture…every aspect of an organization feels the pinch of this culture.”

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What’s the Worst Board Meeting Ever

The Worst Board Meeting Ever

Let’s be frank: not every board meeting is going to be a walk in the park. Sometimes, board meetings are tedious, contentious, and even directionless. Here’s a list of some things that can truly go wrong…plus tips for handling them if they do!

  1. One or two members domineer the meeting.

This is a common occurrence in boards that contain one or two big personalities. Unfortunately, those dominant members can derail a potentially effective board meeting by bulldozing over other opinions or making members fearful of sharing their views. In this instance, it’s important that the board chair steps in to ensure that all members are getting an equal opportunity to speak. The board chair can also address the issue with the member in question outside of the meeting. If the domineering member is the board chair, it’s important for other members to speak up in support of reevaluating the way the meeting is conducted; suggesting a stronger use of Robert’s Rules of Order might also help alleviate disputes.

 

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What Corporate Directors Can Learn From the Wells Fargo Fiasco

What Corporate Directors Can Learn From the Wells Fargo Fiasco

Wells Fargo has certainly had better years than 2016. If you’ve somehow missed the flood of news headlines, check out this summary article by The Week writer, Jeff Spross. The title alone—“The Mind-Blowing Stupidity of Wells Fargo”—should be enough to give any board member a shudder. No director wants their organization to be the topic of a headline like that. The Wells Fargo PR disaster began with aggressive cross-selling tactics and the creation of hundreds of thousands of fraudulent bank accounts and credit lines. These practices were implemented when lower level employees were met with impossible sales expectations and quotas.

When scandals like this occur, it’s important that leaders of the affected organization (as well as leaders of other major companies) take note of the failures and analyze ways they can be either confronted or avoided in the future. Here are some examples of learning opportunities for corporate directors who want to glean something from this downward spiraling situation.
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Is Your Board A Broken Board?

broken board

Because boards are ever-changing entities, they often go through phases of effectiveness. Some phases might include sharp financial growth and strong teamwork between directors and management. Other phases might include the exact opposite. And still others could be a combination of the two—both positives and negatives. Once in a while, though, you may find yourself on a board that is essentially broken. What do we mean by broken? Put simply, we mean that because of one or more internal issues, the board is unable to operate with its highest goal (shareholder benefit) in mind. Here are some signs that you might be serving on a dysfunctional board. Don’t worry, though; all hope is not lost! In fact, here we’ve got some tips for how you can help bring your board back to life.

  1. Lean on parliamentary procedure.

Are you having trouble getting through a basic meeting because of clashing agendas or antagonistic discussions? In this instance, it’s important for boards to turn to their parliamentary procedures; in the U.S. these procedures will typically follow Robert’s Rules of Order. The board chair will have to take an extremely active role in overseeing this process. They will need to conduct themselves with as much neutrality as is possible in order to establish an environment where discussion and voting can occur within the appropriate constraints.
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Building the Most Effective Healthcare Board

Building the Most Effective Healthcare Board

Healthcare is one of the fastest moving industries in the world. Hospitals and health providers are investing in new technology, new processes, and new personnel constantly while working to ensure that they can provide top-notch care at a reasonable price—that’s no easy task! Healthcare boards—or traditional community-based boards—are finding that between changes in compliance legislation and the pace of innovation, staying ahead of the curve takes some serious effort. So how can your healthcare board be a leader in the field and not just playing catch up? Here are a few of our suggestions:

  1. Embrace diversity.

We speak to this topic often on our blog, but it rings particularly true for the healthcare industry. Healthcare boards should strive to include a representative sample of the groups they’ll be serving. A mixture of ethnicities, genders, religious affiliations, and even age can help healthcare boards ensure that they’re not overlooking the needs of any potential patients. A diverse board also means a diversity of ideas, which ultimately leads to better decision-making.
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Finding the Balance Between the Board & Management

Balance Board Management

Boards of directors and management executives are integral to the success of any major company and finding the right balance in board management is key. Although they’re constantly communicating, they serve in very different roles. The board, which is meant to contain an appropriate mix of “outside” and “inside” directors, acts as the guiding force for the company while the CEO and other c-suite leaders carry out their plans for the future. That’s not to say that forward progress and change can’t come directly from the CEO, though.

Duties of the Board

At the end of the day, the board has the final say when it comes to making major decisions for the organization it serves. The entity is expected to uphold its fiduciary duties to the shareholders above all else. In addition, the board hires/fires CEOs, votes on important policies, safeguards resources, and more. For a more in depth explainer of these responsibilities, visit our Board Membership 101 blog series.
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Do You Need a Higher Ed Millennial Board Member?

 higher ed millennial board member

In April of this year, the “Millennial” generation surpassed the “Baby Boomers” as the nation’s largest living generation. Conversely, while the American workforce is getting younger, the composition of trustee boardrooms is getting older. According to the Association of Governing Boards (AGB), “the fastest growing age group on boards is individuals over 70.” Meanwhile, only 15% of independent boards members are under the age of 50.

Maybe these statistics aren’t shocking to you. With age and experience comes wisdom, right? Absolutely. However, this age-homogeneous boardroom could also be holding back the growth of colleges and universities. Here are some ways we think Millennials can impact your board of trustees for the better:

  1. Millennials are closer to the college experience.

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