Let’s Be Candid About Board Succession Planning

Editor’s Note: This blog post originally appeared here from Exponent Philanthropy.

The Wilson Foundation was started in 1963 by Joe Wilson, founder of Xerox Corporation, and his wife, Peggy. When the foundation began its most recent strategic planning process, the board represented three generations with 24 members spread across the country.

We embarked on strategic planning to revisit our giving priorities, but we quickly realized our impact goals are successful only if we have the proper governance structure. In this blog, we share our board succession planning process, but understand that it did not live in a silo—it was all related to our overall impact strategy.

Our process

We had three main goals for our board succession planning:

• Incorporate our next generation
• Analyze board expenses
• Understand how we can better manage the foundation for greater impact

Board governance conversations are more challenging for a family foundation because they are personal, so we hired a facilitator. That helped take any perceived ownership of the process or recommendations off the staff and board chair. We convened a smaller work group that set clear objectives.

We started by asking ourselves a lot of questions:

• What do we look like compared to the field—e.g., size, expenses?
• Is board service a right or a privilege?
• Should we keep discretionary grants for board members?

The proposed changes

The work group was aware that family members would raise concerns about proposed changes to our governance structure. The foundation has played a significant role in bringing the entire family together to encourage the respect, love, and service to the community instilled by the founders. The board has always felt strongly about passing those values on to the next generation.

In developing the proposal, we tried to anticipate concerns and, at the same time, emphasize both our fiduciary and philanthropic duties to the community. For example, we were aware that, without participation on the board, some family members would lose interest in the foundation’s activities. Yet, given the size of the board, paying too much money to bring the family together did not seem appropriate.

The work group proposed reducing the maximum board size from 25 to 11, with two of those seats reserved for incoming next generation members. This would necessitate two-year term limits renewable once, with a one-term hiatus before returning to the board.

This was proposed to our executive committee, which approved the plan. The full proposal went to the full board, which was ultimately denied.

A lesson in prioritization

What was clear from the full board’s discussion was that the concerns we had tried to bake into the proposal around rotation, next generation training, and communication among the entire family were so deep that the board could not accept the size reduction.

It would be dishonest to say that the rejection wasn’t a disappointment. What was heartening, however, was the strong expression of love and admiration for the board’s work and the desire to pass it on to the next generation. During the discussion, members talked about other ways to “down size,” which led to our decisions about strategic direction and other changes to board structure.

This became a lesson in prioritization. The board agreed that the next gen program and family connectedness were greater priorities than our discretionary grant program, which the board voted to eliminate. The board also understood that the family is too large for everyone to serve at the same time. The board voted to maintain the 25-person limit to board membership but to implement term limits. Terms are now three years and can be renewed once with a one-term hiatus before coming back on the board.

Over the next year we worked on finalizing and implementing the following:

• An 18-month next gen training program with a focused curriculum
• A family engagement “menu” with ideas for family to be connected to the foundation when not on the board
• Revamped communication through Board E-news
• A transparent nomination process that includes board expectations and qualifications, a nomination form, and nominating decision guidelines

Advice for boards

Make sure that the succession planning process is respectful, civil and inclusive—even if it means decisions take longer to make. Modeling that for the next generation is very important, and the resulting buy-in by all family members is critical to the long-term success and legitimacy of future board actions.

In addition, be prepared to acknowledge the positives that come out of a negative vote. The positives for us were that family unity and passing on the founders’ values were paramount—a heartening endorsement of their legacy.

Advice for staff

Hiring an outside facilitator was essential. Some of these conversations are emotional, and it is not the place of staff to navigate family dynamics. Also allow the process to ebb and flow. A skilled facilitator helps keep everyone on track but also knows that sometimes groups take three steps forward and one step back.

If the process doesn’t go as planned, as our recommendation did not, find the areas of breakthrough and keep moving those forward. It takes time, but eventually you will end in the right place.