CEO Succession Planning
Professional Practice Statement
What is a professional practice statement? This Professional Practice Statement, developed by the
Association Forum of Chicagoland, is provided as a management tool for associations and individual
association professionals, developed by experts in the industry, and recommended as a means to
achieve excellence in managing associations and other non-for-profit organizations.
Background
CEO succession is inevitable at any association, whether planned or not. As such, establishing a
succession strategy is a key component to ensuring an association's long-term success. An effective
succession plan will minimize disruption and facilitate a smooth leadership transition while maintaining
excellence at the highest level of an organization.
Policy Position
The Association Forum believes that it is an important practice to create and maintain a carefully
considered plan and process for organizational continuity after the departure of a chief executive officer.
Such a plan provides confidence to the governing board and to the organization’s staff that such
departures will not unduly disrupt the ongoing work and strategy of the association.
Professional Practices
An association's governing body should consider succession planning as a fundamental part of risk
management and a basic responsibility of the board. Succession planning is thinking strategically about
a key event in the life cycle of the organization. A good succession-planning process addresses the
following scenarios:
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Emergency Succession Planning - A process that is in place in the event the executive
suddenly departs - either permanently or for an extended period of time (i.e., longer than
three months).
Departure-Defined Succession Planning - A process that is in place for a future planned
retirement or permanent departure of the executive.
Strategic Leader Development - A process that promotes ongoing leadership development
for talent within the organization.
Effective leaders plan an exit that is as positive and graceful as their entrance was. How such an exit is
managed reveals the character and effectiveness of that leader and association.
Professional Practices for the Board
Advanced Planning
Assess the association's future needs and update that assessment regularly in preparation for
planned or unplanned CEO succession.
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Future, long-term vision and successor qualities needed to lead toward that vision.
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Strategic future, coordinating goals and strategies with successor competencies required to
direct achieving them.
Assess the current association culture (values and behaviors) and governance (structure and
member/staff roles). Determine, in light of the future organizational vision and strategic plan if a
change in culture or governance will facilitate goal achievement or strategic success.
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List desired cultural and/or governance changes to be implemented.
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List skill sets, knowledge and experience requirements a successor will need to affect cultural
and/or governance change.
Work with the incumbent to identify, at least in general terms, the planned date for retirement.
At Recruitment Time
If deemed necessary, ensure that an operational and financial audit is completed. Consider an
outside agent for the audits to facilitate the objective transfer of knowledge about the
association's operational and financial status, strengths and weaknesses.
Create a profile of the ideal candidate in terms of strategic competencies, skills, knowledge,
education, experience, style, behavioral and business-specific characteristics.
Update the CEO position description for the successor position which identifies, in light of the
organizational assessment, duties and responsibilities, authorities, reporting relationships and
external relationship responsibilities. Create a matrix of functional duties with competencies
needed to perform them.
Discuss with the incumbent, and reach a board decision about how long the incumbent will
remain on board following the successor’s hire date for transition.
Explore the incumbent’s confidence in dealing effectively with the emotional challenges created
by transitioning. Provide transition coaching either by members or by an external agency if the
incumbent would find it helpful.
Establish the nature of the offer which the search committee is empowered to present to
candidates. This includes parameters or limits for compensation, benefits, relocation expenses
and employment contract terms.
Establish the level of information the search committee is expected to share with the board during
the search and interview process.
Decide if the search committee present one final candidate to the board for approval, or will the
board interview two or three finalists.
Appoint a search committee.
Select a search firm. Ensure they understand the association’s vision, goals, and expectations
for the future.
Professional Practices for the CEO
In a departure-defined situation, CEO's should play an important role in finding his or her n replacement.
The CEO typically wants to leave behind people who are aligned with the organization's values and who
will promote the organization's mission. The CEO should ensure that legacy does not impair futuristic
endeavor. The CEO should guide the board in determining key relationships the new CEO should create
and foster relationships to successfully carry out the associations' strategic plans and assess the future
CEO’s efficacy.
Advanced Organizational Planning
Work towards a Board/incumbent partnership in succession planning.
Candidly discuss the need for succession planning, the process that will be followed, and the role
the incumbent will play.
Define board and CEO roles in the succession process and establish a mutual comfort level for
the Board and CEO with succession planning and processes.
Roles and protocols include those for the incumbent, the board, the search committee and the
search firm.
Establish a mutual understanding of the path to a new CEO as well as any role board, committee
or staff members will play along that path. Include appropriate staff members to some degree in
the organizational assessment.
Create for the Board's consideration a plan/timetable for successor recruitment and transition.
Prior to Departure
Work with the Board to establish the timing and method for succession announcement and
protocols for ongoing communication regarding the CEO's departure, replacement recruiting and
transitioning activities.
A key issue related to succession planning is the transfer of knowledge. A leadership transition
often leads to the loss of critical knowledge that has built up throughout the years. Creating a
knowledge-based culture is very beneficial when an organization is faced with succession of a
leader. Therefore the CEO should document the critical knowledge areas which should include at
a minimum the following:
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Document and determine who should have backup access to knowledge or information
that is located off-site or is number, password or otherwise protected and currently
accessible only to
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Ensure that there is documentation about the location and status of legal documents and
contracts, stakeholder agreements, insurance policies for key persons, business and
financial plans, employee records and historical documents.
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Document calendars for organizational event chronology and timing as well as timecritical actions required by the incumbent.
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Document external relationships: contact information, purpose and nature of the
relationship, status, formal and informal agreements and obligations.
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Pass down as much incumbent knowledge as possible to key management staff.
At Transition Time
Begin transferring external relationships during the current CEO’s tenure, while the search is being
conducted.
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Introduce current staff to relationship partners. Shift lower-level relationship efforts to
other staff where that would give the external partners confidence in continuity without
making them feel less important or that they have limited access to the top.
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Pre-coach and introduce successor to external partners.
Identify staff members who are likely to have difficulty adjusting. Select and assign them an internal
coach to help them through the transition.
Conduct a special session for the Board, helping them to understand their role in letting go of their
chief staff leader and embracing a new one.
Disclaimer
This Professional Practice Statement, developed by the Association Forum of Chicagoland, is provided
as a management tool for associations and individual association professionals, developed by experts in
the industry, and recommended as a means to achieve excellence in managing associations and other
not-for-profit organizations.
The Association Forum of Chicagoland expressly disclaims any warranties or guarantees, expressed or
implied, and shall not be liable for damages of any kind, in connection with the material, information, or
procedures set forth in these Statements or for reliance on the contents of the Statements. In issuing
these Statements, the Association Forum of Chicagoland is not engaged in rendering legal, accounting,
or other professional services. If such services are required, the services of a competent professional
should be sought.
Resource List
ASAE. The Center for Association Leadership. <www.asaecenter.org>
Next in Line: Five Steps for Successful Succession Planning by Andre Mamprin, Banff Centre for
Conferences. Executive Update, Feature Article. December 2002.
Smart Succession Planning in Unpredictable Times. Knowledge Center. August 15, 2012.
Why Association Executives Ignore Risks and Don't Plan for Succession by Robert T. Van Hook, FASAE,
CAE. ASSOCIATIONS NOW. August 2011.
Building and Sustaining a Culture of Innovation
Professional Practice Statement
What is a professional practice statement? This Professional Practice Statement, developed by the
Association Forum of Chicagoland, is provided as a management tool for associations and individual
association professionals, developed by experts in the industry, and recommended as an effective means
to achieve excellence in managing associations and other not-for-profit organizations.
Background
The environment of today’s association is filled with rapid and disruptive changes that can have a
profound impact on the value experience for association members. Changes in the political, legal, social
and technological fabric of our society present both opportunities and threats to how associations plan
and operate to meet the value expectations of members. More than just creativity, systematic and
sustainable innovation involves making meaningful changes to improve products, processes, or
organizational effectiveness and to create new value for members. To remain competitive in this
environment, it is important for association leaders to create the conditions that foster innovation in a
governance and operating environment that is risk adverse, often undercapitalized and which frequently
lacks leadership continuity.
Policy Position
Innovation takes place in many forms and can occur on various levels. It can be large in scope or a small
adjustment resulting in something new or a simple process improvement. The Association Forum of
Chicagoland believes that associations and the executives who lead them should be prepared to
innovate. This involves creating a culture that embraces the innovation mindset. Employee professional
development should include a deep knowledge of member expectations and needs so they can develop
superior member solutions and training on how to notice trends, anticipate threats and discover hidden
opportunities. Associations must develop a systematic process for generating, developing, testing and
implementing innovation so the organization can process an abundance of great ideas. Lastly,
associations must build the confidence of the governing body in the abilities of its staff organization so
they can be nimble to get new initiatives done.
Professional Practices for the Governing Body
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Define expectations of innovation by supporting creativity and expecting a culture that
encourages the free flow of ideas
Require innovation be integrated throughout the organization's operations, that it be continuously
evaluated and results be communicated
Ensure the organization supports strategic experimentation and testing of new ideas by allowing
for some strategic blunders
Commit funding for ongoing innovative initiatives
Professional Practices for Association Professional
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Observe the world like anthropologists; monitoring trends, and determining how it applies to their
organization and their members
Ask provocative questions and challenge assumptions
Foster diversity in staff recruitment to create a culture that benefits from new experiences and
different perspectives
Look for opportunities to solve problems members are encountering which haven’t been fully or
successfully addressed
Look for opportunities to improve quality or eliminate waste
Disclaimer
This Professional Practice Statement, developed by the Association Forum of Chicagoland, is provided
as a management tool for associations and individual association professionals, developed by experts in
the industry, and recommended as a means to achieve excellence in managing associations and other
not-for-profit organizations.
The Association Forum of Chicagoland expressly disclaims any warranties or guarantees, expressed or
implied, and shall not be liable for damages of any kind, in connection with the material, information, or
procedures set forth in these Statements or for reliance on the contents of the Statements. In issuing
these Statements, the Association Forum of Chicagoland is not engaged in rendering legal, accounting,
or other professional services. If such services are required, the services of a competent professional
should be sought.
Resource List
Innovation is Everybody's Business How to Make Yourself Indispensable in Today's Hypercompetitive
World by Robert B. Tucker; John Wiley & Sons, Inc., 2011
Three Rules for Innovation Teams by Harry West; Harvard Business Review www.hbr.org
(http://blogs.hbr.org/cs/2012/03/making_innovation_teams_even_m.html)
4 Qualities of an Innovation Association by Stephanie Schall; Associations Now
(http://www.asaecenter.org/Resources/ANowDetail.cfm?ItemNumber=53452)
How Innovative Leaders Maintain Their Edge by Hal Gregersen, Jeff Dyer; Forbes www.forbes.com
(http://www.forbes.com/sites/innovatorsdna/2012/09/05/how-innovative-leaders-maintain-their-edge/)
Confronting the “no” in Innovation by Harry Hertz; www.nist.gov
(http://www.nist.gov/baldrige/publications/archive/insights_0212.cfm)
Innovation is a Discipline, Not a Cliché by Scott Anthony; Harvard Business Review www.hbr.org
(http://blogs.hbr.org/anthony/2012/05/four_innovation_misconceptions.html)
The Five Personalities of Innovators: Which One Are You? by Brenna Sniderman; Forbes
www.forbes.com (http://www.forbes.com/sites/brennasniderman/2012/03/21/the-five-personalities-ofinnovators-which-one-are-you/)
Association Forum Critical Conversation For the Future Innovation Subgroup Report 040912.
Building a Culture of Innovation
http://info.4imprint.com/wpcontent/uploads/Blue%20Paper%20Innovation.pdf
How to Embed Innovation into Your Organizational Culture, Part 2: Adopting and Sustaining Ideas by
Cassandra Frangos, Cisco Center for Collaborative Leadership
http://www.bscol.se/_wcm/documents/How%20to%20Embed%20Innovation%20-%20Part%202.pdf
Component/Chapters Legal Issues
Professional Practice Statement
What is a professional practice statement? This Professional Practice Statement, developed by the
Association Forum of Chicagoland, is provided as a management tool for associations and individual
association professionals, developed by experts in the industry, and recommended as a means to
achieve excellence in managing associations and other not-for-profit organizations.
Background
Association parents and components are often outgrowths of each other. As a result, there is a natural
affinity between the two organizations. The business operations between them should be in partnership,
structurally and operationally linked according to applicable federal and state laws and sound business
practices. This Professional Practice Statement addresses the legal aspects of the parent/component
arrangement.
A common and traditional structure for association components is geographically based units, configured
locally, statewide or grouped into regions or districts. An emerging option is to configure components
around shared interest groups or communities of interest. The professional practices identified in this
document apply regardless of the chosen component structure.
Policy Statement
The Association Forum of Chicagoland believes that the chapter segment of component relations can be
a competitive advantage that adds value to an association and its members. If an association chooses to
create chapters for the benefit of its members, it must do so legally and responsibly to mitigate against
loss (financial and reputation) to the parent organization.
The Association Forum considers it a best practice that each component (chapter) should be a separate
legal entity defined as an organization. Such components would be legally permitted to enter into a
contract, and be sued if it fails to meet its contractual obligations. Configuring components as separate
legal entities limits the liability of the parent and provides autonomy for the component.
Incorporated or not, there should be a comprehensive charter or affiliation agreement which provides the
framework for both organizations to maintain a strategic partnership.
Issues for the Parent Association
Incorporation and Affiliation Agreements
There are significant advantages to creating components as separate legal entities.
Incorporating them as separate entities limits parent association liability and ensures the
component of its autonomy within its charter or affiliation agreement. Unincorporated component
officers, directors or members may be personally liable for any damages and other liabilities
associated with component activities. Members of an unincorporated component could be
personally responsible for taxes. Officers and directors of unincorporated components may be
held personally responsible for penalties for component noncompliance with federal, state and
local laws and regulations. They may also be subject to personal involvement in lawsuits against
the component.
An affiliation agreement establishes the structure and nature of the parent/component
relationship. It ensures that the parent and component have clearly defined parameters for
interaction, operations and membership agreements.
Recommended Affiliation Agreement or Charter Content
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Requirements for start-up and continued affiliation, including scope of required programs and
services
Geographic, topical or other scope delimiting structures and boundaries
Membership status requirements
Dues and subscriptions requirements
Scope of services provided by the parent
Governance structure requirements, links and representation
Reporting requirements and disclosures
Parent association's approval rights
Name and logo use
Insurance obligations and indemnifications
Federal and state laws compliance
Trademarks, copyrights and intellectual property protections
Quality standards for programming and products/services
Financial arrangements
Minimum liability insurance requirements
Mergers and dissolution
Periodic review of the affiliation agreement or charter
Tax Status
Component tax status and reporting are critical setup decisions for the parent association. It is
recommended that, in addition to the IRS resources noted in this practice statement, the parent
association consult a tax attorney or other tax expert in making these decisions.
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Separately incorporated components must have their own tax status.
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Each component could file for its own tax exempt status. This is the IRS Application for
Recognition of Exemption. http://www.irs.gov/Charities-&-Non-Profits/Application-forRecognition-of-Exemption-1
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The parent association may file for a group exemption for all or some of its components.
Component incorporation is not a requirement, but there is a requirement for some type
of organizing document or charter. Group exemption is separate from the parent
association's tax exemption. http://www.irs.gov/pub/irs-pdf/p4573.pdf
Each component must file an annual information return with the IRS, form 990.
http://www.irs.gov/uac/Current--Form-990-Series---Forms-and-Instructions
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The parent may have each component file its own form 990, or it may file for components
included in a group exemption. http://www.irs.gov/Charities-&-Non-Profits/Returns-Filedby-Organizations-in-Group-Rulings-Resources
Each component must have its own employer identification number. IRS Form SS4
http://www.irs.gov/pub/irs-pdf/fss4.pdf
Component Support
Components are often resource challenged, which can make it difficult for them to keep up with
and remain in compliance with legal and other organizational requirements. Component leaders
may lack the expertise necessary to successfully manage some aspects of component
management. The parent association should provide guidance and/or access to resources for
component leaders about legal issues relevant to component operations.
Issues for the Component/Chapter
As a separate entity, component officers and directors must be informed and able to manage a variety of
legal and regulatory compliance issues. The most significant or frequently encountered are:
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Public disclosure requirements
http://www.asaecenter.org/Resources/whitepaperdetail.cfm?ItemNumber=12214
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UBIT and tax exemption http://www.irs.gov/Charities-&-Non-Profits/Unrelated-Business-IncomeTax
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Trademarks:
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US government: http://www.uspto.gov/trademarks/law/index.jsp
ASAE article: Covering Your Assets: Trademark Protection Basics
http://www.asaecenter.org/files/Covering%20Your%20Assets%20%20Trademark%20Protection%20Basics.pdf
Copyrights http://www.copyright.gov/laws/
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Anti-trust: Antitrust Compliance Guide from ASAE
http://www.asaecenter.org/Resources/modelsdetail.cfm?ItemNumber=39180
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Americans with Disabilities Act Title III compliance requirements http://www.ada.gov/t3hilght.htm
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Lotteries and contest liabilities (laws and regulations vary by state)
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Parliamentary procedure
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Contracts: staff and volunteer authority and empowerment levels, sourcing, competitive bidding,
encumbrances, legal review.
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Directors and Officers liability insurance
The component association should establish communications and monitoring systems in collaboration
with the parent association to ensure that the component remains in compliance with all federal and state
laws and regulations.
Disclaimer
This Professional Practice Statement, developed by the Association Forum of Chicagoland, is provided
as a management tool for associations and individual association professionals, developed by experts in
the industry, and recommended as a means to achieve excellence in managing associations and other
not-for-profit organizations.
The Association Forum of Chicagoland expressly disclaims any warranties or guarantees, expressed or
implied, and shall not be liable for damages of any kind, in connection with the material, information, or
procedures set forth in these Statements or for reliance on the contents of the Statements. In issuing
these Statements, the Association Forum of Chicagoland is not engaged in rendering legal, accounting,
or other professional services. If such services are required, the services of a competent professional
should be sought.
References and Resources
Component Relations Handbook: A Guide to Successfully Managing and Motivating Chapters, Affiliates,
and other Member Groups Author and editor Lowell Aplebaum, co author Trevor Mitchel. Specific
content excerpt Legal Issues by Paula Goedert, Esq. Second Edition, August 2012 published by ASAE.
IRS Tax information for 501 c (3) charitable organizations and other not for profits
http://www.irs.gov/Charities-&-Non-Profits/Charitable-Organizations
IRS Tax information for 501 c (all others, not c3) http://www.irs.gov/Charities-&-Non-Profits/Other-NonProfits
Advisory Committee on Tax Exempt and Government Entities Act - Group Exemptions
http://www.irs.gov/pub/irs-tege/ACT_Group_Ruling_Rpt_061511.pdf
Samples: ASAE website http://www.asaecenter.org/Resources search on Chapter Affiliation Agreements