Succession Planning for Associations: Ensuring Continuity and Growth

1. GROWTH: Building a Succession Plan for Your Association - Panel Discussion Every association professional knows all too well that managing change is an integral part of association management.  It is imperative for associations to have a succession plan to ensure that critical operations and strategies continue in the wake of change.  This panel will discuss the importance of building a succession plan, key elements in a succession plan and best practices for ensuring growth opportunities through your succession plan. Moderator: Eleanor Warmack, CAE, Executive Director, FL Recreation & Park Assn Panelists:Willa Fuller, RN, Executive Director, FL Nurses AssnBennett Napier, CAE, President & CEO, Partners in Association ManagementRusty Payton, CAE, COO, FL Dental Assn

2. Taking the Long View: A Unique Situation • Scouting for candidates from within • Mentoring and Nurturing • Educating and Experiential Learning Identify the characteristics needed • Must be open to all options

3. Growing talent from within • Keep contact with interested individual • Provide opportunities for growth and leadership (Committees, task forces, opportunities to represent the organization) • Provide or suggest education related to the position (F.S.A.E., A.F.P., etc.) • Hire interested party into the organization (Be clear of realistic expectations.) • Person must possess the skills needed, not only be a “good member”

4. The Employees Role

5. It is no longer about the New CEO, but about you • Will you keep your job, and if so, how effective will you be?

6. Engage in Foundation Conversation • I heard from a reliable Board member that the new CEO’s real mission is to create a better meeting and will fire the meeting planner……………… • We put a lot of work into that

7. Be Realistic and Honest • I know our recruitment and retention dropped last year, but our marketing idea of………… • Get Real…Any new CEO can evaluate past reports and has already been briefed by the Board. • Don’t sugarcoat it or try to be a hero

8. Be On Your “A” Game • You really needed to take that vacation during the new CEO’s first 30 days? Hope you enjoyed it!!!!!!!!!!!

9. Its all about rebranding yourself and how you fit into the new CEO’s vision…not how he/she fits into yours.

10. Building a Succession Plan for Your Organization 2014 FSAE Annual Conference – Bennett Napier, CAE

11. Are You Prepared? • Only 14% of those surveyed said that their companies were well-prepared for the loss of a key person. Source: American Management Association

12. Best Practices – Crisis Management • Scenario– Crisis Management – Disability, Illness or Death of CEO, immediate transition • What SOP’s and authorizations are in place • check signing? • payroll? • finances (operating funds, reserves, investments, etc)? • other key vendors, contractual relationships?

13. Best Practices – Crisis Management • Is there a clear cut chain of command? • Do you have a crisis management team in place? • Do you have established policies and procedures for such an instance? • What will the messaging be internally and externally?

14. Best Practices – Training • Have you identified a 2nd in command that could take over in crisis situation? • What are the core skill sets your organization deems as important for a CEO (interim or otherwise)? • Even more important  Are these core skills documented?

15. Best Practices – Training • Do you have a formal training plan for a 2nd in command to address any gap in skills? • If you have a plan, does the rest of the staff know the plan exists? Does the board and volunteer leadership know? What does it entail? What would happen in such a situation? • open communication upfront ensures a better chance of a successful outcome

16. Best Practices - Planning • Key Man/Woman Insurance – What is it? How do you get it? Fund it? And what purposes can it serve? • Key Man/Woman Disability Insurance – What is it? How do you get it? Fund it? And what purposes can it serve? • Golden Handcuff for Key Managers

17. Key Man Insurance • Key person insurance, also commonly called keyman insurance and key man insurance, is an important form of business insurance. • In general, it can be described as an insurance policy taken out by a business to compensate that business for financial losses that would arise from the death or extended incapacity of an important member of the business.. Keyman Insurance policies are usually owned by the business and the aim is to compensate the business for losses incurred with the loss of a key income generator and facilitate business continuity. Key person insurance does not indemnify the actual losses incurred but compensates with a fixed monetary sum as specified on the insurance policy.

18. Key Man Insurance • Many businesses have a key person who is responsible for the majority of profits, or has a unique and hard to replace skill set or Intellectual Property in their mind that is vital to the organization. • An employer may take out a key person insurance policy on the life or health of any employee whose knowledge, work, or overall contribution is considered uniquely valuable to the company. The employer does this to offset the costs (such as hiring temporary help or recruiting a successor) and losses (such as a decreased ability to transact business until successors are trained) which the employer is likely to suffer in the event of the loss of a key person. • Premiums are not tax deductible but may be and often are paid by the organization.

19. Disability Insurance – Keyman and Retirement Protection Retirement Protection Disability Insurance helps you continue saving for retirement in the event of a disability. If you become disabled, the policy pays a benefit in the amount of your retirement plans monthly contribution into a special trust. The money in the trust is invested at your discretion until you reach age 65 and then distributed to help supplement your retirement income. It is not a pension plan. Rather, it is a program that provides disability income insurance to ensure your ability to make retirement plan contributions until the age of 65. The goal: to provide you with close to what you could have expected from the retirement plan if you had not become disabled.

20. Keyman Disability and Business Overhead Coverage • In many cases, the most valuable asset a business has is one or more “key employees”. While the employee may be covered by individual disability insurance and even worker’s compensation, if they were to suffer a disabling illness or injury, the business itself stands to lose significant earnings through that loss. Key-man disability insurance is designed to insure against this potential loss, for the sake of the business. • Business Overhead Coverage - This is also known as Business Overhead Expense (BOE) or Professional Overhead Expense (POE) helps pay normal recurring expenses rent/mortgage, general operating expenses.

21. Best Practices – Transitions (outgoing) • Consider an operational audit • Consider financial audit or review • Consulting transition agreement, where appropriate. • Set clear expectations and time frames.