Executive Succession Planning: Barriers and Substitutes in Nonprofit Organizations

Abstract

Predicted shortages of chief executives combined with growing economic and social significance of the nonprofit sector in an increasingly complex operating environment highlight the need for executive succession planning. Accordingly, our research explores factors that may influence executive succession planning in nonprofit and cooperative forms of organizations. Survey data (N = 242) were analyzed using multiple regression analysis. Results suggest both barriers to and substitutes for executive succession planning that help explain the apparent dearth of succession planning efforts in these organizations. A penchant for continuity was found to be a barrier to such planning, while elements of governance quality and internal development were found to substitute for executive succession planning.

Current trends in cooperative finance

“…As a cooperative CEO approach retirement the board often considers whether it might be easier to merge than to identify, recruit and hire the needed level of management talent. McKee and Froelich (2016) also found that boards faced with CEO succession prefer candidates from their same business sector (cooperative firms prefer managers with cooperative management experience) and that they limited their search to a regional scope. Because of these tendencies, cooperative 1 9 7 9 1 9 8 2 1 9 8 4 1 9 8 6 1 9 8 8 1 9 9 0 1 9 9 3 1 9 9 5 1 9 9 7 1 9 9 9 2 0 0 1 2 0 0 3 2 0 0 5 2 0 0 7 2 0 0 9 2 0 1 1 2 0 1 3 boards often find themselves trying to recruit management talent from a small pool and are competing with neighboring cooperatives.…”

Fatores que impactam o processo de sucessão da alta gestão em cooperativas de crédito no Brasil

“…A propensão para a continuidade nos cargos executivos foi encontrada como uma barreira para o planejamento, enquanto elementos de qualidade de governança e desenvolvimento interno da entidade são fatores encontrados para substituir o planejamento de sucessão executiva (Mckee & Froelich, 2016). Assim, como regra geral, cabe aos conselhos de administração de uma firma, quando sociedades anônimas, a responsabilidade de selecionar o CEO, mas, o histórico mostra que, aparentemente, os conselhos não têm conseguido exercer essa autoridade (Schepker et al, 2018).…”

“…Neste tipo de organização, aparentemente, não há um processo de preparação para a sucessão executiva, e quando existe, a preparação não corresponde ao nível de interesse e preocupação no processo sucessório (Froelich, Mckee, & Rathge, 2011). Todavia, a escassez de CEO combinada com o crescimento econômico e social do setor sem fins lucrativos destaca a necessidade de um planejamento de sucessão executiva nestas organizações (Mckee & Froelich, 2016).…”

“…Grande parte é baseada no modelo mental e no contexto de organizações com finalidade lucrativa (Mckee & Froelich, 2016). No Brasil, em particular, além de haver poucos estudos abordando a sucessão de administradores em cooperativas (Morais, Binotto, & Ruviaro, 2016;Antonialli & Fischmann, 2002), estes estudos foram feitos antes da Resolução nº 4.538/2016 (Brasil, 2016).…”

Human Resource Development and Executive Leadership Succession Planning in Nonprofits

“…According to Santora (2004), surveys show that less than 50% of nonprofits plan for leadership succession. This is a huge risk because as Mckee & Froelich (2016) explain, "predicted shortages of chief executives combined with growing economic and social significance of the nonprofit sector in an increasingly complex operating environment highlight the need for executive succession planning" (p.88). As Santora (2004) highlights, some important tips for nonprofit leaders creating a succession plan are choosing a successor at an early stage, naming the successor, giving the successor leadership experience while sharing vital information with them, and once exiting the organization, not looking back.…”