Succession Planning

Another one of my Knols. This one is on preparing to recruit a new Chief Executive, a process I went through last year. It should be an opportunity for the charity to reflect and define itself. It can be a rewarding or frustrating process and like so many things in life it is all about the planning.

Initial considerations
Agreement on broad strategic objectives
Every new CEO will have ideas of their own as to where they would like to take the charity. Nevertheless it is important for trustees to consider and agree the general direction in which they want their charity to go. Having a three to five-year plan will help define this.

Agreement on the charity’s ethos, values and philosophy
What makes the charity special and what are the fundamental values with which the new CEO must be in agreement? Do staff and trustees agree on what the charity’s ethos, values and philosophy are? How will the trustees test whether long-listed candidates’ personal values and philosophy are compatible with those of the charity?

Identify future risks and challenges
It is also worthwhile spending time considering the major challenges and risks that the charity is facing currently and those which the charity is likely to face in the future. You will then have a much better picture of the sort of person you need to lead the charity into the next decade and will be able to probe, by the questions you ask short-listed candidates, how each candidate will deal with these challenges if they are appointed. Once the above issues have been considered, it is time to turn to some of the practical aspects of recruitment.

In-house or recruitment consultants?
Will you carry out the recruitment process in-house or will you engage some other form of external assistance such as a recruitment consultant or an independent assessor? Will the hunt for the new CEO be by advertisement only or by search as well? If you use recruitment consultants, how will you decide which one will best fulfil your needs?

All trustees or search committee?
Who will drive the process? Will it be all the trustees or will the trustees appoint a search committee? If the latter, who will chair the search committee and who will be on it? Will all the trustees be involved at some stage and, if so, at what stage?

Finally take time out
All these questions and many more will need to be considered by the trustees. Finding time during a routine trustee meeting to consider the broad strategic objectives, the charity’s ethos, values and philosophy and to give due consideration to the myriad of other related questions is nigh impossible if you want to give the issues sufficient and careful consideration. It is therefore strongly recommended that the trustees have an additional meeting or take a half-day out to discuss issues solely relating to the recruitment of the next CEO.

Questions for recruitment consultants
It is important to give time in advance to plan the questions that you wish to ask the recruitment consultants that you may be considering using. Listed below are a few questions that you may wish to ask.

• What recruitment process do you recommend when recruiting by advertisement alone, by search alone and by using a combination of advertising and search?
• How do you marry together candidates that come through search and candidates who respond to advertisements?
• What options do you offer and what are your fees for each option?
• What costs are not included in your fees and can you give us a rough idea of what these are likely to amount to?
• What is the ideal time scale for chief executive recruitment?
• If you are appointed by us, who will lead the process and who will work most closely with us/our search committee?
• Who else will be involved and what proportion of the work will be done by the lead person?
• In the last year how many charity chief executive appointments have you handled? How many were in the same sub-sector as us?
• Who is on your client list and who are you unable to approach as part of the search process?
• Can we speak to the chairs of at least two search committees that you have worked with recently?
• What steps do you take to test the integrity of each long-listed candidate’s CV?
• How do you ascertain that achievements claimed by candidates are genuine and not highly exaggerated?
• What in your view is the most thorough way of taking up references? Do you take up references or do we? 
• Do you take up references from people who are not named as referees but who know the candidate well?
• When the final candidate is selected, do you assist in negotiating the remuneration package?
• What happens if our first choice candidate refuses the offer and we do not feel that any of the other final candidates are suitable?
• What do you do to ensure confidentiality?
• Do you have a diversity policy and a conflict of interest policy? May we have copies?

The search committee’s remit
Having discussed and agreed the charity’s values, ethos, philosophy, broad strategic priorities, key future risks etc., the board needs to agree the remit of the search committee and the parameters within which the search committee must work. Listed below are some of the tasks that may be included in the search committee’s remit.

• Keeping the board and especially the chair of trustees, if he/she is not on the search committee, informed of progress;
• Selecting, engaging, briefing, liaising and supervising the recruitment consultants, if they are being used, and agreeing the level of their services and their fee;
• Deciding the outline remuneration package and main terms and conditions of the new chief executive’s contract;
• Producing the person specification, job description and candidate information pack with the help of others such as the current chief executive or the recruitment consultant;
• Agreeing, in consultation with the board, the outline timetable for the process and the detailed project plan with the recruitment consultant if one is being used, and ensuring that this timetable is complied with; 
• Deciding on the level of involvement of the search committee in long-listing and short-listing;
• Deciding on the process to reduce the long-list to the short-list [e.g. by interview only or a more detailed process, carried out by recruitment consultant or search committee] 
• Deciding on the level of involvement of the current chief executive, the senior management team and other stakeholders;
• Deciding whether or not to use an independent external adviser;
• Agreeing the method for making the final selection from the short-list, including at which stages the whole board will be involved, and carrying through this process;
• Deciding the timing of taking up references. Taking up references of short-listed candidates or the final candidate in writing and by telephone or face-to-face. Carrying out all relevant checks including CRB (if necessary) and medical checks on the chosen candidate;
• Informing the unsuccessful short-listed candidates and providing them with feedback. (This is sometimes delegated to the recruitment consultant);
• Thanking referees and those who nominated candidates during the search process;
• Negotiating the remuneration package and main terms and conditions of employment with the successful candidate (This is often done through the recruitment consultant);
• Planning the timetable for announcing the new appointment both internally and externally;
• Organising, in partnership with the chair of trustees, induction, support, arrangements for the review of performance towards the end of the probationary period and arrangements for the on-going appraisal of the chief executive;
• Outline planning of events to mark the achievements of the out-going chief executive and expressing the charity’s appreciation of his/her contribution.

The remit of the search committee should be sufficiently specific to ensure that the search committee takes the process in the right direction and sufficiently flexible to allow the search committee some creativity and extemporisation.

Sound governance and public trust

There is a lot of talk about public trust in the charity sector. A few years ago I wrote the following Knol ( a unit of knowledge ) which sets out my understanding of good governance. It has had 1,424 views and comments but as Google is prioritising its product efforts Knol is being discontinued. I’ve transferred this to my blog for safe keeping and hopefully your comments. Dose anyone fancy contributing to an updated version?

In my view sound governance is key to public trust. There are also some practical examples for Trustee recruitment.

Why a code of governance?
Governance is high on the agenda in all sectors – public, private and voluntary. As voluntary and community organisation working for public benefit, we are increasingly expected to demonstrate how well we are governed. Good governance is a vital part of how voluntary and community organisations operate and are held accountable.

Other sectors have already developed Codes in recent years. Housing associations have a detailed Code prepared by the National Housing Federation. Co-operatives UK have the Corporate Governance Code of Best Practise. In the public sector, there is the new Good Governance Standard for Public Services. The private sector has its 2004 Combined Code on Corporate Governance, which builds on the work of the Cadbury, Greenbury and Higgs Inquiries over the last decade or so. Action in our sector is overdue.

This Code arises from directly expressed needs in the voluntary sector. These came from organisations which needed guidance to clarify the main principles of governance and to help them in decision-making, accountability and the work of their boards. In response to these demands, a group of voluntary sector infrastructure associations, with the Charity Commission, came together and decided to work towards developing the Code. Vitally, the Code has thus been developed by and for voluntary and community organisations.

What is ‘governance’?
One writer on governance in our sector has helpfully defined governance as being: “the systems and processes concerned with ensuring the overall direction, effectiveness, supervision and accountability of an organisation.”
In our sector, trustees take ultimate responsibility for the governance of their organisations. However, governance is not a role for trustees alone. More, it is the way trustees work with chief executives and staff, volunteers, service users, members and other stakeholders to ensure their organisation is effectively and properly run and meets the needs for which the organisation was set up.

The key principles of good governance
The key principles set out below have been used in the drawing up of this Code, and provide the main headings for its sections. They are set out here not as a part of the Code, but to set the context, and to help with interpretation.

Underlying each of these is the additional principle of equality – that of ensuring equity, diversity and equality of treatment for all sections of the community. We see this as fundamental to the work of all voluntary and community sector organisations; rather than creating a separate ‘Equality’ section, the principle has been used to inform all sections of the Code.

• Board leadership. Every organisation should be led and controlled by an effective Board of trustees which collectively ensures delivery of its objects, sets its strategic direction and upholds its values 
• The Board in control. The trustees as a Board should collectively be responsible and accountable for ensuring and monitoring that the organisation is performing well, is solvent, and complies with all its obligations 
• The high performance Board. The Board should have clear responsibilities and functions, and should compose and organise itself to discharge them effectively 
• Board review and renewal. The Board should periodically review its own and the organisation’s effectiveness, and take any necessary steps to ensure that both continue to work well 
• Board delegation. The Board should set out the functions of sub-committees, officers, the chief executive, other staff and agents in clear delegated authorities, and should monitor their performance 
• Board and trustee integrity. The Board and individual trustees should act according to high ethical standards, and ensure that conflicts of interest are properly dealt with. 
• The open Board. The Board should be open, responsive and accountable to its users, beneficiaries, members, partners and others with an interest in its work.

These principles can also be expressed in terms of personal attributes:

The Nolan principles
Selflessness: Holders of public office should take decisions solely in terms of the public interest. They should not do so in order to gain financial or other benefits for themselves, their family or their friends.
Integrity: Holders of public office should not place themselves under any financial or other obligation to outside individuals or organisations that might influence them in the performance of their official duties.
Objectivity: In carrying out public business, including making public appointments, awarding contracts, or recommending individuals for rewards and benefits, holders of public office should make choices on merit.
Accountability: Holders of public office are accountable for their decisions and actions to the public and must submit themselves to whatever scrutiny is appropriate to their office.
Openness: Holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands.
Honesty: Holders of public office have a duty to declare any private interests relating to their public duties and to take steps to resolve any conflicts arising in a way that protects the public interest.
Leadership: Holders of public office should promote and support these principles by leadership and example.

Board Leadership
Every organisation should be led and controlled by an effective Board of trustees which collectively ensures delivery of its objects, sets its strategic direction and upholds its values. Trustees have and must accept ultimate responsibility for directing the affairs of their organisation, ensuring it is solvent, well-run, and delivering the outcomes for which it has been set up.

Strategic direction
Trustees should focus on the strategic direction of their organisation, and avoid becoming involved in day to day operational decisions and matters. Where trustees do need to become involved in operational matters, they should separate their strategic and operational roles.

The Board in control
The trustees as a Board should collectively be responsible and accountable for ensuring and monitoring that the organisation is performing well, is solvent, and complies with all its obligations.

• Compliance The Board must ensure that the organisation complies with its own governing document, relevant laws, and the requirements of any regulatory bodies.
• Internal controls The Board should maintain and regularly review the organisation’s system of internal controls, performance reporting, policies and procedures.
• Prudence The Board must act prudently to protect the assets and property of the organisation, and ensure that they are used to deliver the organisation’s objectives.
• Managing Risk The Board must regularly review the risks to which the organisation is subject, and take action to mitigate risks identified.
• Equality and diversity The Board should ensure that it upholds and applies the principles of equality and diversity, and that the organisation is fair and open to all sections of the community in all of its activities.

The high performance Board

• The Board should have clear responsibilities and functions, and should compose and organise itself to discharge them effectively.
• Trustee duties and responsibilities Trustees should understand their duties and responsibilities and should have a statement defining them.
• The effective Board The Board should organise its work to ensure that it makes the most effective use of the time, skills and knowledge of trustees.
• Information and advice Trustees should ensure that they receive the advice and information they need in order to make good decisions.
• Skills and experience The trustees should have the diverse range of skills, experience and knowledge needed to run the organisation effectively.
• Development and support Trustees should ensure that they receive the necessary induction, training and ongoing support needed to discharge their duties.
• The Chief Executive The Board should make proper arrangements for the supervision, support, appraisal and remuneration of its CEO.

Board review and renewal

• The Board should periodically review its own and the organisation’s effectiveness, and take any necessary steps to ensure that both continue to work well.
• Performance appraisal The Board should regularly review and assess its own performance, that of individual trustees, and of sub-committees, standing groups and other bodies.
• Renewal and Recruitment The Board should have a strategy for its own renewal. Recruitment of new trustees should be open, and focused on creating a diverse and effective Board.
• Review The Board should periodically carry out strategic reviews of all aspects of the organisation’s work, and use the results to inform positive change and innovation.

Board delegation

• The Board should set out the functions of sub-committees, officers, the CEO, other staff and agents in clear delegated authorities, and should monitor their performance.
• Clarity of roles The Board should define the roles and responsibilities of the chair and other honorary officers, in writing.
• Effective delegation The Board should ensure that staff, volunteers and agents have sufficient delegated authority to discharge their duties. All delegated authorities must have clear limits relating to budgetary and other matters.
• Terms of reference The Board should set clear terms of reference for subcommittees, standing groups, advisory panels, etc.
• Monitoring All delegated authorities must be subject to regular monitoring by the Board.

Board and trustee integrity

• The Board and individual trustees should act according to high ethical standards, and ensure that conflicts of interest are properly dealt with.
• No personal benefit Trustees must not benefit from their position beyond what is allowed by the law and is in the interests of the organisation.
• Dealing with conflicts of interest Trustees should identify and promptly declare any actual or potential conflicts of interest affecting them.
• Probity There should be clear guidelines for receipt of gifts or hospitality by trustees.

Board openness

• The Board should be open, responsive and accountable to its users, beneficiaries, members, partners and others with an interest in its work.
• Communication and consultation Each organisation should identify those with a legitimate interest in its work (stakeholders), and ensure that there is a strategy for regular and effective communication with them about the organisation’s achievements and work.
• Openness and accountability The Board should be open and accountable to stakeholders about its own work, and the governance of the organisation.
• Stakeholder involvement The Board should encourage and enable the engagement of key stakeholders, such as users and beneficiaries, in the organisation’s planning and decision-making.

Evaluation of effectiveness of the board of trustees
The Board’s effectiveness can be monitored by examining whether we have:

• achieved our aims & objectives for the preceding year
• met or exceeded the needs of our beneficiaries
• used our resources, both financial & physical, to their greatest effect
• worked within our policy framework.

The individual and collective expertise of Trustees along with their emotional commitment, contribution and regular attendance at Board meetings recognised and acknowledged.

Board effectiveness should be reviewed at the AGM, and would focus on:

• organisational achievement based on the above criteria
• Board interactivity, support and fit with achieving organisational outcomes.

To support this focus, the Board would seek feedback from the Senior Management Team on overall performance (feed back via the Chief Executive).

Board tenure
The Charities tenure policy should support the Charity’s commitment to grow, and develop sustainable services at the centre of our cause, with the desire to allow ample time for trustees to:

• become familiar with the day-to-day operational work of the Charity for which the staff team are responsible
• contribute to the governance of the Charity for which the Board is responsible
• sustain a consistent approach to the strategic focus of the Charity
• arrange for cohesive succession planning for new trustees to join the Board, along with the allocation of the key roles of Chair, Vice Chair and Secretary.

The intention is to achieve a successful board mix that can:

• be refreshed to support the changing needs of the organisation
• ensure balance is maintained by creating a culture of trustees moving on as a positive strategy that underpins the advantages of a rolling board and sustains continuity
• encourages new people to join bringing fresh skills and thinking
• and acknowledges individual past contribution to the Charity’s success.

Board tenure policy

• The charity invites individuals with appropriate experience to join the Board of Trustees and to confirm their commitment to serve the Charity as a trustee for a period of two terms of three years.
• Designated trustees will be appointed to the role of Chair for a period of two years.
• Designated trustees will be appointed to the role of Vice Chair for a minimum period of one year, and then succeed to the role of Chair when appropriate.
• Designated trustees will be appointed to the role of Secretary for as long as possible during the remainder of their term.

The best minute of your business life or getting a brilliant networking sixty seconds

Many networking groups give their members and visitors just sixty seconds to put themselves across. So how do you make the most of this VERY short time to do what's also known as the elevator pitch on the basis that if you met your best prospect in a lift how would you get your message over in the time it would take to get to the 6th floor?


Some points to consider from my experience of good and bad pitches;

• Be passionate and enthusiastic about your business
• Smile
• Make good eye contact with everyone in the room, although don’t just rotate your head from side to side
• Humour can work well, if you can build it in naturall
• Be clear about your USP
• Use props
• The word "help" is very powerful - "I would like your help to find new clients..."
• The word "imagine" is very powerful - "Imagine you are facing a new business challenge..."
• Remember your VITAL call to action - "This week I am looking for.."
• Plan your elevator pitch rather than making it up on the spot
• Vary your pitches each time you deliver
• Facts tell, stories sell

Some years ago I attended a one day networking conference and got some inspiration for structuring my 60 seconds in the form of two suggested templates which might be helpful to you:

Hello my name is...
I help people...
And this is really good for them because...
I did this with (success story)...
Which went really well because...
So this week I would like to speak to ... and I want you to say...to them

OR

My name is...
I work with...
Who have a problem with...
Because what I do is...
Which helps them...
For example (success story)...
The person I would like to speak to is ...as I want you to say...to them

When we stand up and deliver our elevator pitch we sometimes forget that communication is a two way process. In fact it is a flawed process since one study concluded that:

• we hear half of what is said
• we listen to half of what we hear
• we understand half of that
• we believe half of that
• and remember only half of that!

...hence the reason why you need to explain yourself clearly when you rely heavily on word of mouth recommendation. Think of your networking time as a relay race with your 60 seconds being the baton that passes from you to a group member and from that member to their contacts. The better your pitch the easier it will be for others to spread the word on your behalf.