Emergency succession planning is more important than ever in the hectic and unstable corporate world of today. An abrupt crisis or the unanticipated exit of a top executive can devastate an organization, leaving it exposed and possibly doing permanent harm. Because of this, it’s crucial to have a thorough emergency succession plan in place in order to guarantee business continuity and reduce disruptions during these trying times.
In this article, we’ll dive deeper into the importance of emergency succession planning, discuss the key steps involved in developing a successful plan, and offer practical tips to help you get started.
Rationale
The Board of Directors is adopting policies and procedures for the temporary appointment of an Acting Chief Executive Officer (CEO) in the event of an unexpected and prolonged absence of the CEO in order to ensure the continuous coverage of executive duties essential to the ongoing operations of XYZ Company HR Consulting and its service to clients.
While the Board acknowledges that such an absence is highly improbable and certainly undesirable, it also believes that due diligence in exercising its governance functions requires that it have an emergency executive succession plan in place. This strategy is anticipated to provide consistency in staff operations and external partnerships.
Priority Functions of the CEO position at XYZ Company HR Consulting
Among the duties performed by the CEO, the following are the key functions of the CEO to be covered by an acting director:
1. Serve as the organization’s principal leader, representative, and spokesperson to the greater community and clients;
2. Support the Board of Directors
a. Make sure the board’s leadership is honest and capable, and deal with questions of role clarity, governance, bylaws and policies, corporate structure, and membership.
b. Assist with orientation of new Board members.
c. Prepare Executive reports to the Board of Directors and Executive Committee and attend various Committee meetings, as necessary.
3. Convene and lead the management team
4. Participate in the recruitment, interview, selection, and evaluation process for directly supervised staff and other key executive and management positions.
5. Strategize the organization’s short-range and long-range program and project goals, particularly in organizing and planning:
a. Identify overall resource development goals and revenue goals
b. Establish, maintain, and cultivate relations with clients, community organizations, and professional organizations that use and/or impact XYZ Company HR services, products, and activities
c. Maintain accountability for current year operating budget and for financial performance of portfolio
Succession planning in event of a temporary, unplanned absence – Short Term
1. Definitions
a. When the circumstances that led to the CEO’s absence are resolved, it is anticipated that the CEO will return to his or her post.
b. As opposed to a planned leave, like a vacation or sabbatical, an unplanned absence occurs unexpectedly.
c. A short-term absence is three months or less.
2. Who may appoint the Acting CEO
a. The Board of Directors authorizes the Executive Committee to implement the terms of this emergency plan in the event of an unplanned absence of the CEO.
b. The HR Manager is required to notify the Board Chair of the CEO’s unexpected absence as soon as possible.
c. The Chair shall call a meeting of the Executive Committee as soon as practical to confirm the actions outlined in this plan or to consider any necessary changes.
3. Appointment to the position of Acting CEO
a. The Board Executive Committee will meet as soon as practical after learning of the CEO’s unplanned absence to make an interim appointment.
b. The Board may select a XYZ Company HR management employee or external candidate into the temporary acting CEO assignment. The Executive Committee may also consider the option of splitting executive duties among several appointees.
4. Authority of the appointee
a. The person appointed as Acting CEO shall have the full authority for decision making and independent action as the regular CEO.
5. Compensation
a. Compensation for the Acting CEO will be determined based on negotiations between the Board Executive Committee and the designated individual. Once determined, the appointment period and compensation will be documented in writing.
6. Board member responsible for oversight and support to the Acting CEO
a. As with the CEO, the Board Chair will have the responsibility of monitoring the work of the Acting CEO. The executive in this interim leadership position will have specific support needs, and the board chair will be aware of these needs.
7. Communications Plan
a. Board members and the Acting CEO shall notify XYZ Company HR Consulting of the temporary leadership structure as soon as practicable after the Acting CEO has started filling in for an unanticipated absence.
Succession plan in event of a temporary, unplanned absence – Long Term
1. Definition
a. A long-term absence is one that is expected to last more than three months
2. Procedures
a. The procedures and conditions to be followed shall be the same as for a short term absence with two additions
i. The Board Chair and Executive Committee will give immediate consideration, in consultation with the Acting CEO, to temporarily backfilling the XYZ Company HR management position left vacant by the Acting CEO (if the position is filled with a XYZ Company HR employee). This is in recognition of the fact that, for a term of more than three months, it may not be reasonable to expect the Acting CEO to carry the duties of both positions. The function of a temporary manager would focus on covering priority areas in which the Acting CEO needs assistance.
ii. The Acting CEO would decide how much to pay the backfill employee, but in no case would it exceed 5% of the range of the position being filled, whichever is higher.
Succession plan in event of a PERMANENT unplanned absence
1. Definition
a. When it has been made clear that the CEO won’t be returning to the job, it is said to be on a permanent leave of absence.
2. Procedures
a. The procedures and conditions shall be the same as for a long-term temporary absence with one addition
i. Within 30 days, the Board of Directors shall appoint a Transition and Search Committee to plan and carry out a transition to a new regular CEO.
b. It shall be the responsibility of this committee, with the support of the HR Manager, to implement the following preliminary transition plan:
i. Communicate with key stakeholders regarding actions taken by the board in naming an acting successor, appointing a transition committee, and implementing the succession policy.
ii. Consider the need for consulting assistance based on the circumstance of the transition.
iii. Review the organization’s business plan and conduct a brief assessment of organizational strengths, weaknesses, opportunities, and threats to identify priority issues that may need to be addressed during the transition process and to identify attributes and characteristics that are important to consider in the selection of the next regular leader.
iv. Establish a time frame and plan for the recruitment and selection process.
v. The Board should use similar procedures in case of an executive transition that simultaneously involves the CEO and other key management staff. In such instances, the board may also consider temporarily subcontracting some of the organizational functions.
Approvals and maintenance of records
1. Succession plan approval
a. This succession plan will be approved by the Board of Directors
2. Upkeep of the plan
a. The plan shall be reviewed, updated, and affirmed by the Board of Directors periodically.
The entire business strategy of every organization must include emergency succession planning. It guarantees that a business can carry on in the event of the untimely departure or loss of a senior executive.
Hope this Article will help you implement emergency succession planning during unforeseen circumstances.
Also read Essential HR Policy on Work Hours 2023