The following article originally appeared in the August newsletter to clients of Kiley Advisors, LLC. Reprinted with permission.
In this final article on Succession Planning, which we reiterate is THE hallmark of all successful organizations, we want to discuss two things: the critical steps that must occur when there is a change in the CEO role and ownership structure; and the critical relationship between the successor and the succeeded – this is key especially in a CEO change, but also important at all levels. Space and unequivocal support are the right approaches for the succeeded.
Change of control in the CEO position impacts all major constituencies – employees, clients, building partners and professional partners. In privately-held and family-held companies, this is almost always a three part process: Succession (selection of the person); Business Continuity (transferring the bonding and banking responsibilities); and Ownership Transfer (sale and purchase of stock, which also can lead to changes in the board structure). Specialized legal counsel should be involved as many legal documents must be properly executed. Hopefully, especially at this level, the transition has been well planned, the successor well-mentored and coached, and everyone impacted well-prepared in advance. The actual occurrence is seamless. However, sometimes tragedy necessitates this action occurring rapidly. Read more » about Successors and the Succeeded