Of all the responsibilities your nonprofit board takes on, managing a successful leadership transition will likely be the most demanding—and the most important.

Selecting and integrating a new executive director involves much more than interviewing a few good candidates. In fact, the process should go to the heart of your organization’s mission, both now and in the future. You can be sure the outcome will directly affect every aspect of your work, from staff retention and successful events to the number and generosity of your donors.

Face the Inevitable

A 2015 survey found that nearly half of nonprofit directors expected to retire within five years. Most organizations, however, have no methodical plan for leadership succession.

Sometimes the need for transition comes as a surprise, but not usually. Because all leaders move on eventually, your organization should create a thorough succession plan well before it’s needed.

Change can create unease in the ranks, but having a careful plan already in place can calm it. A well-crafted process can turn a succession crisis into an opportunity to move the entire organization forward.

Features of an Effective Plan

Whether you expect a leadership succession in the next few years or further out, your plan should include some key elements.

Ask the board to lead. That may seem obvious, but many nonprofits report less-than-vigorous board engagement on this question. Beginning with your CEO, and relying on a committee for day-to-day organization, your board should discuss, create, and manage the planning process.
Consider future needs. Will your mission change over the next few years? Will your strategy to carry it out change? Now’s a critical time for that review because the new tax law could negatively impact midlevel charitable giving, reduce government revenue, and, by extension, government spending. That means nonprofits may be asked to do more with less.
The ultimate impact of the new tax law is yet to be seen, but it should be taken into consideration for any future planning given your particular circumstances.
Create a pipeline of future leaders. Identify potential officers, along with their strengths and gaps, and then consciously help them develop higher leadership skills. Make this an explicit aspect of your hiring process as well, and establish it as part of your board’s culture.
Track your progress. Your plan should include a time frame with benchmarks and a schedule to complete them. Also include one or more “drills” for a worst-case scenario—a discussion in your board about how well your plan would stand up in the event of a sudden resignation.

Approaching Transition

Whether you’ve completely planned a leadership transition, a smooth succession has several stages.
• Finalize a job description and compensation
• Search for candidates
• Interview candidates
• Integrate the new leadership

To manage these tasks, assign committees of your board—one for the overall transition and another to conduct the candidate search. Beware of a red flag: board members often underestimate the commitment of time and effort these critical tasks require.

Don’t sugarcoat this work—spell it out beforehand. Then assemble committees that balance outlook, backgrounds, and talents. Some boards may also consider engaging an outside consultant to work with the committees, manage some tasks, or even oversee the entire process.

The job description should flow from your mission, goals, and strategic plan. It may be very different from the last one, depending on your current director’s tenure and how the world has changed. A compensation decision, meanwhile, must factor in the job description, market conditions, and your own resources.

Your search for candidates might begin within the organization if your planning process has discovered and trained a gem or two. But even then, your search committee should conduct a broad public campaign of networking, advertising, and conversations with internal and external stakeholders. That’s the only way to assemble a top-flight list and ensure objective evaluation.

Interviews and Selection

Use telephone interviews to sort your search committee’s initial list of candidates, and narrow it down for in-person conversations. When you’ve identified the top contenders, ask each to meet with small-group sessions. One effective approach is to create small groups that include a board member, an officer, and staff from various levels within the organization.

Out of these interviews, you should be able to identify three or so finalists for formal interviews with the board. Don’t leave those meetings to whim, but establish the same clear criteria and questions for each candidate. Then, vote.

When you’ve selected a new director, begin the last planned stage: the new leader’s integration into the organization and its culture.