Having a robust succession plan in place helps avoid governance crises and maintains stakeholder confidence when those transitions occur. In recent years, CEO turnover has been on the rise – for example, 2024 saw a record number of CEO departures [1] – yet many organisations still lack formal succession plans [2]. This article provides a comprehensive guide to succession planning for both boards of directors and chief executives, offering practical guidance, examples, and best practices grounded in effective governance principles.

Why succession planning is critical

Leadership change is inevitable. A long-serving CEO may retire or resign, or a board’s composition may evolve as directors reach term limits or new skills are required. Without a plan, these departures can leave organisations “scrambling for replacements,” which can disrupt operations and damage confidence [3]. Good succession planning, on the other hand, ensures a smooth transition of power, preserving strategic direction and corporate stability. It’s no surprise that governance codes and regulators emphasise its importance. For instance, the UK Corporate Governance Code explicitly calls for “plans in place for orderly succession to both the board and senior management positions” and the development of a diverse pipeline of future leaders [4].

A lack of planning can carry steep costs. Studies have found that poor succession processes can erode market value and lead to loss of critical institutional knowledge when key leaders depart [5]. In contrast, companies with well-prepared successions safeguard their business continuity and reputation. As one leadership expert notes, “CEO succession is the most important job a board has… when it’s not done or done poorly, the costs are dramatic and obvious.”[6] In sectors like financial services, regulators even warn that inadequate succession planning can invite regulatory sanctions [7]. Clearly, effective succession planning isn’t just an HR exercise – it is a core business strategy and a hallmark of good governance [5].

Succession planning for CEOs

Planning for CEO succession is a top priority for boards. The chief executive officer holds immense influence over an organisation’s performance and culture, so ensuring a capable successor is ready to take the helm is vital. Yet many companies remain unprepared: a recent survey found only about half of boards have a written CEO succession plan [2], and nearly one-fifth admit they have no viable internal candidate identified [8]. To avoid a leadership vacuum and the chaos that can follow an unplanned CEO exit, boards should take a proactive, structured approach to CEO succession:

Start early and make it ongoing: Succession planning should begin well in advance of any expected transition – ideally years ahead [9]. Rather than treat it as a last-minute reaction when a CEO announces departure, boards should integrate succession planning into their regular governance routine. Identify potential future CEOs and revisit the plan annually (or more often) to update it as business needs and talent pools evolve. Many companies fail to do this; in fact, 56% of firms aren’t planning 3–5 years out for CEO succession[9]. A forward-looking approach gives the board ample time to groom candidates and avoid rushed decisions under pressure.

Define the leadership criteria: A successful succession starts with knowing what you’re looking for. Boards should define the skills, experience, and qualities the next CEO will need to lead the organisation’s future. This profile should flow from the company’s strategic plan and the challenges or opportunities on the horizon [10]. For example, if a company’s strategy focuses on digital transformation, the board might prioritise candidates with strong technology and innovation leadership. Setting clear criteria helps ensure the succession process is aligned with long-term strategy and not just a reaction to short-term events.

Develop internal talent and a pipeline: Often the best CEO candidates are already inside the organisation. Succession planning should include identifying high-potential executives and investing in their development so they can step up when needed [11][12]. This might involve rotating promising leaders through different roles, expanding their responsibilities, and providing mentorship or coaching. A famous example is Apple: well before Steve Jobs stepped down, Apple’s board had prepared Tim Cook as the successor by assigning him key responsibilities and even having him serve as acting CEO during Jobs’ health absences [13]. That preparation paid off with a seamless transition. However, preparation is not always the norm – 68% of new CEOs have admitted they weren’t truly prepared for the job [14]. Boards can avoid this by ensuring would-be successors get the training and exposure needed to succeed. Importantly, the current CEO should be involved in mentoring future leaders, but ultimately the board must drive the process of selecting and readying CEO successors [15].

Consider external candidates (and know your options): While developing internal talent is crucial, boards should also scan the external market for potential leaders. In some cases, an outside hire might better fit the future needs or bring fresh perspective. Maintaining a slate of both internal and external candidates gives the board flexibility [15]. External executive search firms or advisors can assist in benchmarking candidates. The key is for the board to have at least a few qualified options in mind at any given time – so that if the CEO role suddenly opens, the replacement isn’t starting from a cold search. Many boards do this informally; a more formal approach ensures no viable candidate is overlooked.

Establish an emergency succession plan: Not all CEO transitions are predictable. Illness, sudden resignation, scandal, or even death can create an immediate leadership void. Part of succession planning is preparing for these “hit by a bus” scenarios. The board should decide in advance who would step in as interim CEO if the current chief executive were to depart abruptly [16]. Often this is a senior executive like a COO or CFO, or even a board member, who can serve as a short-term caretaker. Having a written contingency plan ensures that, in a crisis, everyone knows the chain of command and the business can continue operating with minimal disruption [16]. Unfortunately, many companies don’t think about succession in emergency terms – an oversight which one governance expert calls surprising given the high stakes [17]. By planning for worst-case scenarios, the board can react swiftly and calmly if an unplanned transition occurs.

Manage the transition and onboarding: A good succession plan doesn’t end at naming a successor; it also outlines how to hand over the reins smoothly. Boards should set a timetable and process for transitioning a new CEO into the role. This could include overlap time with the outgoing CEO, clear 30-60-90 day expectations for the new leader, and a communications strategy to reassure stakeholders. For example, a transition roadmap might specify goals for the new CEO’s first week, first 30 days, 60 days, and so on [18] – such as meeting key stakeholders, reviewing strategy, and identifying early wins. It’s also wise to plan the public announcement and messaging. An endorsement from the departing CEO or a carefully crafted exit statement can signal continuity and confidence in the successor [19]. All these efforts help set the new leader (and the company) up for success. Indeed, research shows many leadership transitions falter because the new executives are “not set up for success” in their onboarding phase [20]. A thorough plan avoids that pitfall.

Keep the board engaged and the plan updated: Succession planning is not a one-time event – it’s a continuous process. The board (often via its Nomination or Governance Committee) should review and update the CEO succession plan regularly, adjusting for changes in the company’s direction or talent pipeline [21]. This includes updating the list of potential candidates as people are promoted, retire, or leave the company, and as new talent emerges. Regular updates ensure the plan remains realistic and relevant. Additionally, the full board should be kept in the loop. While details of candidates can be sensitive, the board as a whole must understand the succession strategy and buy into it. Transparency among directors is key to avoiding surprises or disagreements when it’s time to make a leadership change [22]. Ultimately, succession planning should be embedded in the company’s culture – when done well, it becomes simply part of how the organisation plans for its future.

Succession planning for the board of directors

Succession planning isn’t just for executive roles – boards themselves need renewal and succession to remain effective. A high-performing board is composed of directors with the right mix of skills and perspectives to oversee the organisation’s strategy. Over time, however, boards face turnover due to term limits, retirements, or shifts in required expertise. An orderly board succession process maintains continuity in governance and ensures the board’s composition keeps pace with the organisation’s needs. In fact, best-practice codes suggest that board membership be “regularly refreshed” to avoid stagnation [23]. Sadly, many organisations (especially in the nonprofit sector) lack a formal plan for board succession – one survey found only 12.5% of nonprofit boards have a written succession policy for their board leadership [24]. The following are key elements of effective board succession planning, applicable to listed companies, private firms, and nonprofits alike:

1. Assign responsibility (Nominating committee)

Just as companies have committees for audit or remuneration, there should be a committee (often called the Nominating & Governance Committee or a Board Development Committee) that oversees board succession planning [25]. This committee leads the process of identifying future board candidates, reviewing the board’s composition, and ensuring succession is a regular item on the board’s agenda. Clear accountability is important – without it, succession efforts can fall through the cracks. In smaller organisations without many committees, the board chair or a dedicated task force can take on this role, but the key is to have someone in charge of driving the planning.

2. Regularly evaluate board composition and performance

You can’t plan where to take the board if you don’t know where it currently stands. Effective boards routinely assess their own performance and skills mix [26]. This may be done through annual board evaluations, skills matrix analyses, and peer reviews. By evaluating the strengths and weaknesses of the current board, and comparing them against the organisation’s strategic needs, the board can pinpoint gaps to fill in future appointments. For example, a board might conclude it needs more digital expertise or diversity in background. Regular evaluations also help identify underperforming directors or areas where fresh perspectives are needed. Data-driven insight into board composition is an invaluable foundation for succession planning.

3. Identify future needs and ideal director profiles

Succession planning for a board should be strategy-led. Consider the organisation’s 3-5 year outlook: Are there emerging risks or growth areas that the board will need expertise in? Are there upcoming expansions into new markets, or evolving stakeholder expectations (such as ESG concerns)? By identifying the leadership priorities and skills the board will require [10], the nominating committee can define the profile of future directors who would best complement the board. This might include specific industry experience, functional expertise (e.g. cybersecurity or international finance), or other attributes like representing a key stakeholder group. Defining these criteria in advance ensures that when a board seat opens, the selection is guided by strategic fit rather than whoever happens to be available.

4. Map upcoming vacancies and tenure

A practical step in board succession is to project when board seats will turn over [27]. Take stock of each director’s term limits (if any), ages, and personal plans. If the organisation has term or age limits – common in nonprofits and some public boards – you’ll know exactly when certain directors must retire. Even without formal limits, directors may intend to step down after a number of years. Maintaining a forward-looking calendar of potential board departures (e.g. “Director X likely retiring in 2 years; Director Y’s third term ends next AGM”) allows the board to start recruiting well ahead of time. This prevents the last-minute scramble to fill a sudden vacancy. It also enables staged succession (perhaps bringing new directors on board slightly before an experienced director departs, for knowledge transfer). By mapping anticipated turnover, boards can time their recruitment to keep a balance of experienced and new members at all times.

5. Develop a pipeline of board candidates

Just as companies maintain a talent pipeline for management roles, boards should maintain a list of potential candidates for future board service [28]. This might include names of individuals who have the expertise or backgrounds identified in your needs assessment. The pipeline can be developed through various means: engaging an executive search firm specializing in board recruitment, tapping into the board’s networks and referrals, or scouting leaders in relevant industries or communities. In nonprofit organisations, promising candidates might emerge from active volunteers or advisors. For a private or family company, it might include next-generation family members or external professionals with desired skills. The important thing is to cultivate relationships with potential directors early – for example, inviting them to serve on a board committee or attend certain meetings (as observers) to gauge fit and interest. Keeping an updated and diverse list of board-ready candidates will significantly streamline the appointment process when openings arise.

6. Prioritise diversity and inclusion

Board succession planning is an opportunity to improve the board’s diversity in all its forms. This goes beyond gender or ethnicity to include diversity of thought, age, nationality, and professional background. When planning for new directors, boards should “keep diversity top of mind,” deliberately seeking candidates who bring perspectives not already present on the board [29]. Diverse boards are shown to make better decisions and avoid groupthink. Some jurisdictions even mandate aspects of board diversity (for example, gender quotas in some countries’ corporate governance rules) [23]. Whether or not legally required, a broad range of voices on the board signals good governance to stakeholders. Succession plans should therefore treat each board vacancy as a chance to enhance the board’s diversity profile – for instance, if the board has no directors under 50, or lacks any members with non-profit sector experience, those dimensions can be actively sought in the next recruitment round. Setting diversity goals as part of succession criteria can help ensure this focus.

7. Onboarding and integrating new directors

A thorough succession plan doesn’t stop at recruiting a new board member – it also outlines how to effectively onboard them. Bringing in new directors is only beneficial if they can get up to speed and contribute quickly. Boards should have an onboarding programme for incoming members [30], including orientation on the organisation’s mission, strategy, financials, and governance processes. Assigning a mentor (an experienced board member) to a new director can help integrate them into board culture. Succession planning should consider the handoff: for example, if a long-tenured director (perhaps the only one with deep knowledge of a certain oversight area) is retiring, ensure the incoming member gets a download of that knowledge or that another continuing director can fill the gap. Effective onboarding ensures continuity even as individuals change, thereby realising the full value of careful succession efforts.

Continuous renewal and best-practice governance

Finally, boards should treat succession planning as an ongoing cycle of improvement, not a one-off task [31]. This means regularly revisiting the board’s needs, monitoring the performance of new appointees, and being willing to make further changes if needed. High-performing boards often institutionalise practices like annual board evaluations (often facilitated by an independent firm) to gain candid feedback and data on whether recent changes are working [32]. They also foster a culture where succession is viewed positively – as a way to bring in fresh talent – rather than a threat to incumbent members. In organisations with founders or dominant personalities, this cultural aspect is crucial: everyone must recognise that succession is about the organisation’s long-term success, not personal loyalties. By normalising turnover and planning for it, the board can avoid the pitfalls of stagnation and ensure it always has the right people around the table to meet evolving governance challenges.

Adapting succession planning to different organisation types

Succession planning principles apply across sectors, but there are nuances for listed companies, private firms, and nonprofits that are worth noting:

Listed companies
Publicly traded companies often face greater scrutiny around succession planning. Shareholders and regulators expect boards to have robust plans, given the impact a CEO or board change can have on stock price and company performance. In many jurisdictions, governance codes (like the UK’s) mandate disclosure of the board’s succession planning efforts [4]. Moreover, sudden leadership changes must often be disclosed publicly, so boards of listed companies walk a fine line between planning discreetly and keeping investors informed when the time comes [33]. Best practice for public companies is to make succession planning a regular part of board governance, with updates provided in annual reports or governance statements to assure shareholders that the company is prepared. These companies also tend to use professional search firms extensively to identify top-tier CEO candidates or diverse independent director nominees, ensuring a wide pool of talent is considered.

Private firms
Private companies may not have external shareholders watching, but they have their own challenges. Founders or family owners might be reluctant to step aside, and formal succession plans may be overlooked in favour of “we’ll handle it when the time comes.” This can be risky. In family-owned businesses, succession planning should include whether leadership will pass to a family member or an outside professional, and preparations for that choice. Engaging the board (or advisory board) and even outside experts can bring objectivity to what can be an emotional decision. Private firms benefit from many of the same practices as public ones – evaluating leadership needs, grooming talent, and having emergency backups – even if done more informally. The key is not to rely solely on unwritten understandings. A sudden loss of a founder-CEO without a clear successor can jeopardise the company’s future. Thus, even without regulatory pressure, private companies are wise to create written succession plans and update them as the business grows or ownership changes. This also reassures employees and business partners that the company has continuity beyond the current leaders.

Nonprofit organisations
Nonprofits (and charities) face unique succession planning considerations. Their CEOs (often called Executive Directors) and board members are crucial for fulfilling the mission and maintaining donor confidence. Yet many nonprofits under-invest in succession planning – as noted, only 1 in 8 nonprofits had a formal board succession policy in one survey [24]. Nonprofits often have mandated board term limits (about 54% of nonprofit boards have term limits according to BoardSource)[34], meaning turnover is built-in. This makes succession planning for the board essential to avoid lapses in governance when volunteers cycle off. Additionally, nonprofits may rely on a charismatic founder or long-serving executive; planning for their departure is critical to sustain programs and donor relationships.

A best practice in nonprofits is to tie succession planning to strategic planning: as the organisation sets its future goals, it concurrently assesses what leadership will be needed to get there. For example, if a small nonprofit plans to scale nationally in five years, the board might identify that a successor ED with experience in multi-site management is needed, and start building connections to find that person. Nonprofits should also consider cross-training staff and delegating responsibilities so that if an ED leaves suddenly, internal staff can keep things running until a new leader is found. Finally, transparent communication with stakeholders (staff, clients, funders) about leadership transitions is important in nonprofits to maintain trust – they will want reassurance that the cause they care about is in steady hands through any change at the top.

No matter the organisation type, succession planning should be tailored to fit the context but never ignored. Listed companies have formal structures and more resources for it, whereas small nonprofits might be more limited – yet even a basic plan is better than none. The common thread is that planning ahead for leadership change is a sign of a resilient, well-governed organisation.

Q&A

Q: When should we start succession planning for a CEO or board role?

A: Ideally, immediately. Succession planning is not something to postpone until a leader announces their departure. In fact, starting 3, 5, or even 10 years in advance for key roles is recommended [9]. Of course, plans will be adjusted over time, but the point is to always be preparing. Boards should treat succession planning as an ongoing agenda item – for example, conducting an annual review of the CEO succession plan and periodically discussing board renewal needs. Even if a CEO is new or a director just joined, the board can begin identifying what qualities the next leaders should have and who might fit those roles in the future. It is far easier to refine a long-term plan than to craft a new one under the pressure of an impending exit. In short, start now and never really “stop” succession planning; it should continuously evolve with your organisation.

Q: Who is responsible for succession planning in an organisation?

A: Ultimate responsibility lies with the board of directors, particularly for CEO succession. The board (often via a Nomination or Governance Committee) should lead the process of identifying and developing CEO successors and approving a succession plan [4]. A CEO may assist by grooming internal talent and providing input – after all, CEOs have a deep view of the management bench. However, when it comes to selecting the next CEO (even if that means replacing themselves), good practice is for the CEO to step back and let the board drive the decision [15]. For board succession, the board itself again holds responsibility, typically coordinated by the chair or a nominating committee. In both cases, the HR department plays a supporting role: HR can provide assessments of internal candidates, help with leadership development programs, and ensure the organisation has processes to cultivate future leaders. But HR does not replace the board’s role – think of HR as an advisor and facilitator in succession planning. In summary, the board governs succession planning, the CEO and HR support it, and the final accountability for a successful plan rests with the board’s leadership.

Q: How do we develop internal candidates for top leadership roles?

A: Developing internal talent is a core part of succession planning. First, identify high-potential individuals within your organisation – those who could realistically grow into a CEO or director role. Once identified, give them opportunities to stretch and prove themselves. This can include rotating them through different departments, assigning them to lead significant projects or business units, and exposing them to the board. Mentorship is also key: a combination of coaching from senior leaders and feedback from the board can accelerate a manager’s growth. Many successful successions involve the outgoing leader actively mentoring their successor (as seen when Bill Gates mentored Steve Ballmer at Microsoft, or more formally when Steve Jobs prepared Tim Cook at Apple [13]). Ensure that internal candidates also receive external training or development where needed – for example, enrolling in executive education or receiving coaching on specific skills. Another tip is to involve promising executives in strategy planning and board meetings (perhaps presenting periodically) so the board can get to know them. This familiarity helps the board assess readiness and build confidence in a candidate. Finally, be honest with internal hopefuls about their development areas. Not everyone will become CEO, but those who aspire to should know what experience or competencies they need to gain to be a contender. By investing in internal talent this way, even if the board ultimately hires an external CEO, the organisation benefits from having a stronger leadership bench across the board. And if the internal leader does take over, they’ll hit the ground running with much more preparation.

Q: What if a current CEO (or founder) is resistant to succession planning?

A: This is a common challenge. Incumbent CEOs or founders may feel threatened by the topic of succession, interpreting it as a signal that the board lacks confidence in them or is eager for their exit. The key is to frame succession planning as a positive, routine governance practice – not as an immediate push for change. The board chair should initiate a frank but respectful dialogue with the CEO, emphasizing that “every CEO will move on at some point, and companies with a solid plan are best placed to succeed when that happens [35]". This makes it clear that planning is in the best interest of the organisation and even part of the CEO’s legacy (ensuring the organisation thrives after them). If a CEO still refuses to engage – perhaps insisting they’ll never need a successor – the board must be prepared to assert its authority. Remember that succession planning is ultimately the board’s responsibility, and it should proceed with or without full CEO enthusiasm if necessary[36]. Tactically, the board can conduct more of the planning in camera (privately) if a CEO is very sensitive, while keeping the CEO informed at a high level. In founder-led companies, involving an outside facilitator or coach can sometimes help the founder come to terms with planning their succession by providing an external perspective. The worst approach is to avoid the topic entirely; that only delays an inevitable and often messy outcome. Instead, keep communication open, stress that this is standard practice, and possibly highlight examples of respected leaders who planned their successions well (presenting it as something admirable). Over time, even a reluctant CEO may come to see the wisdom in having a plan. If not, the board should still develop one discreetly – the organisation’s continuity is too important to leave to one individual’s willingness.

Q: How often should we review or update our succession plans?

A: Succession plans should be living documents. It’s wise to review them at least annually, and additionally whenever a significant change occurs. For CEO succession, an annual review by the board (or nominating committee) can check whether identified candidates are still with the company and progressing, whether the organisation’s direction has changed requiring different skills, and whether there are any new promising leaders to add to the pipeline. If the CEO’s own plans have changed (say, deciding to delay retirement, or conversely an earlier departure), the plan should be adjusted accordingly. For board succession, timing often revolves around the annual meeting or board evaluation cycle – this is a good opportunity each year to discuss upcoming director rotations and refresh the candidate pipeline. Besides regular yearly check-ins, certain triggers should prompt an immediate update: for example, if a top internal CEO candidate resigns to join another company, the succession plan needs revisiting. Or if the company undergoes a major strategic pivot, the profile of the ideal next CEO might need to be revised to match the new direction. Think of the succession plan like a strategy document – continuous alignment with the organisation’s situation is necessary. Also, keep records of these reviews (even informal notes), as they demonstrate that the board is actively managing succession, which can be important information for regulators or investors in some cases.

Q: Should our succession plans be confidential? How do we communicate about succession?

A: Succession planning often involves sensitive information – discussing people’s futures and potentially their shortcomings – so a degree of confidentiality is important. Boards typically keep CEO succession discussions in executive sessions (without the executive present) or within a committee, and detailed plans are not widely distributed internally. Premature exposure of a CEO succession plan could create uncertainty or political infighting among executives. That said, transparency within the board is crucial [22]. Every director should be aware of the plan and agree on the approach. As for communication beyond the boardroom, the general rule is to communicate after decisions are made, not during the planning. For CEO transitions, companies usually announce the news once a successor is chosen or a timeline is agreed with the outgoing CEO. At that point, it’s important to convey stability: emphasise that a thoughtful process was in place and the company is prepared for a smooth handover. In listed companies, such announcements are often required to be made promptly for market transparency. For board succession, communication is usually more low-key – new director appointments are disclosed through annual meeting proxy statements or press releases when a director is nominated or steps down. Internally, however, it can be reassuring to senior management and employees to know that the board does have a succession process (without necessarily sharing the details of who is on the shortlist). Striking the right balance is key: keep plans under wraps while in development, but once action is taken (a transition is imminent), communicate openly to those affected and to stakeholders, highlighting that the transition is part of a planned and orderly process.

Q: What should an emergency succession plan include?

A: An emergency succession plan deals with the unplanned, sudden loss of a leader due to events like death, serious illness, or abrupt resignation. It should be a subset of your overall succession planning documentation. Key elements include: - Interim Leadership Assignment: Decide who would immediately take over on a temporary basis for the CEO (or other key executive) in an emergency [16]. This could be the COO, CFO, another senior executive, or a board member. Ensure that person is aware of this designation and ideally has had some cross-training or exposure to the CEO’s key duties. For a board emergency (e.g. the Chair suddenly unable to serve), have a Vice Chair or senior independent director ready to step in. - Critical Actions Checklist: Outline the immediate steps to take in an emergency succession. For example: Board Chair calls emergency board meeting; spokesperson is designated for communications; key internal and external stakeholders (employees, investors, regulators, donors, etc.) are notified with a prepared statement. Essentially, it’s a crisis management plan focused on leadership change. - Search Plan Launch: The emergency plan should trigger the start of a formal search (internal and/or external) for a permanent replacement, as well as a target timeline. Even if someone interim steps in, the board should expedite the process to find the long-term leader. Define who will lead this search (e.g. the nominating committee, assisted by an external search firm). - Communications Plan: Pre-draft announcements or press release templates for various scenarios (“CEO in hospital – interim appointed” or “Sudden resignation – acting CEO named”)[19]. In a crisis, having these messages ready will save precious time and ensure consistency. Also decide how the news will be communicated internally to staff to maintain morale. - Authority and Decision-Making: Clarify what authority the interim leader will have (usually full acting CEO authority) and any limits or special board oversight during the interim period. Also, if there are any decisions that must be deferred until a permanent leader is found, note those.

By detailing these items, an emergency succession plan allows the organisation to respond swiftly and calmly during an unexpected leadership vacuum. The goal is to project stability – to show that even though the event was unplanned, the response is planned. Many boards find peace of mind in knowing this “break glass in case of emergency” plan exists, and stakeholders will be reassured that the company or nonprofit can weather the storm without drifting.

Q: How does succession planning for a nonprofit differ from that for a business?

A: The fundamentals are similar – in both cases, it’s about preparing for leadership change – but there are a few differences in emphasis. Nonprofits often have more frequent board turnover due to term limits and volunteer nature, so board succession tends to be a regular, ongoing process. They may also have more stakeholder groups (like clients, members, donors) who feel a sense of ownership in the organisation’s leadership, so communication around transitions might involve more community engagement. Additionally, nonprofits might place extra focus on ensuring the successor (be it a new Executive Director or a new Board Chair) is aligned with the mission and values, as this cultural fit can be as important as management skills in the nonprofit context. Resource constraints can affect nonprofits too – they may not have a deep bench of internal candidates or the funds for high-end search firms. This means nonprofits sometimes have to be creative, for example by developing leadership within their volunteer base or forming partnerships to source talent. On the plus side, the nonprofit sector has support organisations (like BoardSource and nonprofit associations) that provide templates and guidance for succession planning tailored to mission-driven organisations. One interesting insight: despite the importance, many nonprofits lack formal plans – recall that just 12.5% of nonprofit boards had a written leadership succession policy [24]. So, if you’re a nonprofit leader reading this, a big takeaway is to not delay creating a succession plan because you assume your organisation is “different.” Start small if needed (e.g. outline an emergency backup for your Executive Director and identify one or two potential future leaders), and build from there. The mission continuity depends on it.

Q: How can we ensure diversity and inclusion in succession planning?

A: Ensuring diversity in your leadership pipeline requires a conscious effort. It’s easy for succession planning to inadvertently become a “clone search” – where leaders pick successors who remind them of themselves. In fact, studies have shown CEOs often have a bias toward candidates similar to them, which can perpetuate homogeneity [37]. To counter this, boards and HR should bake diversity goals into the succession criteria. This means when identifying potential internal candidates or screening external ones, consider a broad range of backgrounds and profiles. For example, require that at least one woman or one underrepresented minority candidate is considered for every CEO succession. Or if your board has all members from the same industry, make it a point that the next director comes from a different sector to bring a new perspective. Tools like a board skills matrix can help highlight diversity gaps in competencies and demographics, guiding the search to fill those gaps. It’s also important to cultivate a wide network: reach out to professional associations, leadership programs, and search consultants that specialise in diverse talent to help find candidates beyond the usual circles. Another best practice is to create development opportunities for a diverse slate of internal leaders, not just the “obvious” ones. Mentorship programs can pair diverse junior talent with senior executives to prepare them for future roles. Finally, tone at the top matters – the board and CEO should openly champion the value of diverse leadership. When everyone knows that, for instance, international experience or gender diversity is a priority, it becomes a natural part of succession discussions. Over time, these practices produce a richer pool of successors. The benefit isn’t just optics: diverse leadership has been linked to better performance and innovation, so your succession plan is more likely to yield a leader who can navigate a complex, globalised environment. In short, diversity should be a thread running through the entire succession planning process, from planning criteria to candidate development and selection.

Succession planning for boards or CEOs is a journey, not a destination. By approaching it with diligence, openness, and a strategic mindset, organisations of all types can ensure they have the right leaders ready when change inevitably comes. An effective succession plan instills confidence – in employees, investors, donors, and other stakeholders – that the organisation’s success is bigger than one person and will endure into the future. As governance experts frequently remind us, good succession planning today is what secures an organisation’s legacy tomorrow [38][6].

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