Succession Planning Series Part II: Legal Issues

Before I move on to solutions and best practices, I wanted to make a quick detour on this Succession Planning voyage of ours (it”s my blog so I can do that *raspberry*).

It”s important that I point out that there are legal considerations that must be taken into account  when devising a succession plan. These are somewhat different than what a for-profit would be concerned about. In those instances, things are complicated by the reality that an owner/partner/member might have to be bought out of the organization, estates might become involved and  you may have the whole family succession quandary to deal with.

With non-profits the concerns are primarily employment related. These can be:

  • Accusations of age/race/gender discrimination
  • Breaching an employment agreement

The best way to protect against the first point is to “paper up”. In other words detail as much as you. This is where evaluations, write-ups, policies, etc. begin to come in handy. You”ll want a way to show that merit, skill and performance were heavily involved in your decision as to a successor.  One step ahead of that, you”ll want to ensure that merits, skill and performance ARE in fact involved. Simple, I know. But you”d be surprised.  You can start now by detailing the types of traits you”d like a successor to have, and what  it is skill-wise that you”re looking for, etc. If you have the privilege of having an HR department, you”ll  want to make sure they”re involved from the start.

With regard to the second concern that”s just a matter of making sure there aren”t provisions in an employee”s contract that you”re breaching when choosing a successor. In desperation to hook that terrific intern, did you happen to promise in their contract that you”d train them to be next in line and then end up choosing someone else? Whelp. That could be a problem, but one that can easily be avoided.

As a side note, this a perfect example of why you”ll want to be careful when making guarantees/promises/representations in an employment contract. The more open-ended you leave the language the better off you”ll  be (for example, rather than saying “train to succeed the Executive Director” you could just say “managerial and leadership training”. Still gives them that warm feeling but without giving you heart-burn).

Another consideration you”ll want to take into consideration is the type of entity the non-profit is. If a corporation, is there something in the Articles of Incorporation governing succession? If an LLC, does the membership agreement say anything in particular? Always be cognizant of your governing and formation docs when making leadership or structural changes of any kind.

Next up! Best practices…..


  1. Human Resource Executive Online – Planning for CEO Succession
  2. Succession Planning in HR |
  3. Management and HR Resources | Minnesota Council of Nonprofits
  4. Sample Staff Management and HR Resources: Staff Evaluations – Resources – ASAE


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