Is your organization well-positioned with a deep bench of talent? Do you have the right skillsets to handle critical operations and strategic initiatives? Human capital is a major component of an organization’s risk management function and strategic planning efforts. And as part of its responsibility to drive change and growth, the board should be continually monitoring and discussing the organization’s people power.
This planning should go beyond any upcoming key retirements to include the organization’s strategic approach to hiring, retaining and developing top talent. As noted earlier in this series, boards are not typically involved in operational matters, such as technology automation or cybersecurity hygiene, but members should have a full understanding of how the organization functions and the people who make that possible.
These board conversations will prevent the organization from being caught off guard by a variety of human resources scenarios, as well as ensuring the stability and continuity of operations amidst changes. One important place for a board to start is succession for key roles and responsibilities — let’s take a look at where and how to develop a contingency plan for your people power.
Where to start
Board members should start with identifying the key roles that need to be filled for the organization to function, such as CEO and CFO. Determine if any current employees could be a successor for that role, and direct your HR team to create a talent development plan for those individuals to help them learn the new role should the need arise. The board should ensure these potential successors have the resources and training needed if they were to step into the role.
For many boards, these conversations aren’t happening because they don’t know where to start. If your board is having trouble identifying potential successors, it can be helpful to enlist the help of a third-party organization. An outside resource can help evaluate boards evaluate their leadership team from an unbiased perspective, and such an organization can also help develop training and development plans for the identified successors.
Consider outside help
It may be the case that there isn’t anyone internally who is the right fit. In that situation, an outside resource may be necessary to find a temporary or interim candidate for the role or outsourcing the role long-term. A third-party organization can help you find the outsourcing solution that works best for your company.
Not having a contingency plan can leave your organization in a tough spot when someone leaves unexpectedly, or a tragic accident occurs. You may think that an employee is years off from retirement, but anything can happen, and it’s better to be prepared.
Require ample notice
Your board should also discuss whether notice requirements should be added to employment contracts for key roles. For example, in the case of retirement, you can ask the employee to provide a two-year notice. This allows time to slowly transition clients, identify a successor to the role and have all those necessary conversations. With departures, it is not feasible to require a two-year notice; however, with certain key roles, you can request more than a two-week notice. This at least allows the board and organizational leadership some extra time to figure out the next steps.
Keep up communication
Once your board establishes a contingency plan, be sure to set up a regular time to revisit it. Make it a part of your board’s yearly key meeting. If one of the successors you’ve identified leaves, reevaluate the plan again at that point. Determine if the plan still makes sense and if the outside resources are still around and able to help.
The underlying theme of it all is communication. You need to keep regular communication with the employees tapped to step into the role should the situation arise to make sure it’s still aligned with their goals and priorities. Maintain communication with any outside resources to ensure they’re still able to offer their assistance.
RKL Virtual Management Solutions’ Workforce Strategies team can help guide your board through these necessary conversations. Contact your RKL advisor or use the form below to get started.