Transition Management Consulting, Inc.

CEO Tenure & Succession Research

by Robert T. Van Hook, CAE | Oct 01, 2010

Research Summary: Association and Nonprofit Executive Tenure and Succession

Association and nonprofit CEOs were asked about executive tenure and succession in a survey of association executives fielded by Transition Management Consulting during the summer of 2010. The findings were reported by TMC President and co-founder Bob Van Hook at the American Society of Association Executives (ASAE) Annual meeting session on August 24, 2010.

Key findings of the survey were:

  • 45% of CEOs responded that they plan to leave their current positions within 3 years and 70% said they planned to leave within 5 years
  • Despite this anticipated churn within the CEO ranks, only slightly more than 23% reported having a succession plan
  • Of those CEOs with a succession plan, more than 98% reported that the plan was not reviewed and updated annually
  • The primary reason given for not having a succession plan was that the CEO and/or the board of directors did not think it was a priority
  • 66% of CEOs responded that they do not think there is an optimal length of CEO tenure
  • Of the 35% who thought there was an optimal length of tenure for a CEO, most thought it was about 6-10 years.
The survey showed that 45% of CEOs responded that they plan to leave their current positions within 3 years and 70% said they planned to leave within 5 years. Given the anticipated CEO turnover revealed in this study, boards of directors should insist on succession planning. Yet, only 23.2% of the CEOs indicated that they have a succession plan for their positions.

We believe that it is important for associations to have succession plans for both CEOs and senior staff positions. Further, the board should review and update succession plans annually to ensure that the information is up to date and to gain or reaffirm buy-in. We see the critical decisions around executive succession as strategic and risk management issues that a forward thinking board of directors should review and update annually.

The succession plan should answer such questions as:
  • For planned departures, are there people within the organization who can be groomed for succession? What will the grooming entail, and how might that be accomplished?
  • For unplanned departures, who will provide interim management in case of the departure of the CEO with less than 6 months? What criteria will be used for selecting either an internal staff interim or external professional interim?
  • At what point does the organization consider the absence of the CEO a long-term absence or departure?
  • Who will make the succession decisions in an emergency?
  • What is the plan for communicating the executive’s departure?
  • How and when will the plan be revisited and renewed?

An aspect that sometimes gets lost is that often when the CEO leaves, so might other key staff. Having an organization-wide succession plan can help the organization retain critical operational information, even if key staff people leave. Such a process should document critical aspects of the work of senior staff – people, processes, and content – that needs to be captured to ensure that the organization is not damaged by their departure.

If you have any questions about this research, please contact Transition Management Consulting at 202-244-3163.

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