Board Succession Planning

SUCCESSION PHILOSOPHY

Why Board Succession Matters

BOARD SUCCESSION PHILOSOPHY

WHY THIS MATTERS:
☐ Board composition affects company success
☐ Director needs change as company evolves
☐ Smooth transitions maintain continuity
☐ Pipeline prevents rushed decisions
☐ Good succession enables good governance
☐ Term limits require planning

SUCCESSION TRIGGERS:

Natural Transitions:
☐ Term limits reached
☐ Fund lifecycle ending
☐ Director retirement
☐ Portfolio conflict emerging
☐ Stage progression (need different expertise)

Proactive Changes:
☐ Skill gaps identified
☐ Diversity goals
☐ Strategy shift requiring new expertise
☐ Board performance issues
☐ IPO preparation

Reactive Changes:
☐ Director health/availability
☐ Performance concerns
☐ Conflict of interest
☐ Regulatory requirements
☐ Investor changes

SUCCESSION PRINCIPLES:

1. ALWAYS BE CULTIVATING
   ☐ Pipeline should always have candidates
   ☐ Relationships take time to build
   ☐ Don't wait until you have a seat open
   ☐ Evaluate continuously

2. THINK AHEAD
   ☐ Consider needs 2-3 years out
   ☐ Company stage will evolve
   ☐ Current gaps vs. future gaps
   ☐ Composition not just individuals

3. SMOOTH TRANSITIONS
   ☐ Overlap when possible
   ☐ Knowledge transfer critical
   ☐ Relationships need handoff
   ☐ Avoid governance gaps

4. GRATITUDE AND RESPECT
   ☐ Honor outgoing directors
   ☐ Thank them properly
   ☐ Maintain relationships
   ☐ May need them again

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CURRENT BOARD ASSESSMENT

Board Composition Review

BOARD COMPOSITION ASSESSMENT

DIRECTOR INVENTORY:

Director 1: _______________________________________________
Category: ☐ Investor ☐ Independent ☐ Founder/Mgmt
Term: Started: _____ Ends: _____ Renewal: ☐ Yes ☐ No
Committees: _______________________________________________
Expertise: _______________________________________________
Engagement level: ☐ High ☐ Medium ☐ Low
Value added: ☐ High ☐ Medium ☐ Low
Future outlook: ☐ Continuing ☐ Transitioning ☐ Unknown

Director 2: _______________________________________________
Category: ☐ Investor ☐ Independent ☐ Founder/Mgmt
Term: Started: _____ Ends: _____ Renewal: ☐ Yes ☐ No
Committees: _______________________________________________
Expertise: _______________________________________________
Engagement level: ☐ High ☐ Medium ☐ Low
Value added: ☐ High ☐ Medium ☐ Low
Future outlook: ☐ Continuing ☐ Transitioning ☐ Unknown

Director 3: _______________________________________________
Category: ☐ Investor ☐ Independent ☐ Founder/Mgmt
Term: Started: _____ Ends: _____ Renewal: ☐ Yes ☐ No
Committees: _______________________________________________
Expertise: _______________________________________________
Engagement level: ☐ High ☐ Medium ☐ Low
Value added: ☐ High ☐ Medium ☐ Low
Future outlook: ☐ Continuing ☐ Transitioning ☐ Unknown

Director 4: _______________________________________________
Category: ☐ Investor ☐ Independent ☐ Founder/Mgmt
Term: Started: _____ Ends: _____ Renewal: ☐ Yes ☐ No
Committees: _______________________________________________
Expertise: _______________________________________________
Engagement level: ☐ High ☐ Medium ☐ Low
Value added: ☐ High ☐ Medium ☐ Low
Future outlook: ☐ Continuing ☐ Transitioning ☐ Unknown

Director 5: _______________________________________________
Category: ☐ Investor ☐ Independent ☐ Founder/Mgmt
Term: Started: _____ Ends: _____ Renewal: ☐ Yes ☐ No
Committees: _______________________________________________
Expertise: _______________________________________________
Engagement level: ☐ High ☐ Medium ☐ Low
Value added: ☐ High ☐ Medium ☐ Low
Future outlook: ☐ Continuing ☐ Transitioning ☐ Unknown

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COMPOSITION SUMMARY:

By Category:
☐ Investor directors: ___ / ___
☐ Independent directors: ___ / ___
☐ Management/founder: ___ / ___

By Term Status:
☐ Long-term (no end date): ___
☐ Expiring in 1 year: ___
☐ Expiring in 2-3 years: ___
☐ Recently added: ___

Skills Assessment Matrix

BOARD SKILLS MATRIX

CURRENT COVERAGE ASSESSMENT:

Rate each area 1-5 for current board:
(1=No coverage, 5=Deep expertise)

Domain Expertise:
☐ Your industry: ___/5
☐ Adjacent industries: ___/5
☐ Target customer: ___/5

Functional Expertise:
☐ Go-to-market/Sales: ___/5
☐ Marketing: ___/5
☐ Finance/CFO: ___/5
☐ Product: ___/5
☐ Engineering: ___/5
☐ People/HR: ___/5
☐ Operations: ___/5
☐ Legal/regulatory: ___/5

Stage Experience:
☐ Current company stage: ___/5
☐ Next stage (where headed): ___/5
☐ Exit experience: ___/5
☐ Public company: ___/5

Special Skills:
☐ M&A experience: ___/5
☐ International: ___/5
☐ CEO coaching: ___/5
☐ Crisis management: ___/5

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FUTURE NEEDS ASSESSMENT:

Based on 2-3 year strategy, what expertise needed?
Priority 1: _______________________________________________
Priority 2: _______________________________________________
Priority 3: _______________________________________________

GAPS TO FILL:

Critical gaps (must fill):
1. _______________________________________________
2. _______________________________________________

Important gaps (should fill):
1. _______________________________________________
2. _______________________________________________

Diversity Assessment

Dimension	Current	Target	Gap
Gender diversity
Racial/ethnic diversity
Age/generational mix
Background diversity (operator/investor)
Geographic diversity

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PIPELINE DEVELOPMENT

Director Pipeline Framework

DIRECTOR PIPELINE FRAMEWORK

PIPELINE PRINCIPLES:
☐ Always have candidates in development
☐ Relationships before roles
☐ Multiple candidates per need
☐ Long cultivation cycles (12-24 months)
☐ Test fit before formal process

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SOURCING CHANNELS:

1. INVESTOR NETWORKS
   ☐ Portfolio company referrals
   ☐ Other GPs
   ☐ LP connections
   ☐ Advisory relationships

2. INDUSTRY NETWORKS
   ☐ Conferences and events
   ☐ Industry associations
   ☐ Speaking engagements
   ☐ Customer executives

3. PROFESSIONAL NETWORKS
   ☐ Executive recruiters
   ☐ CEO peer groups
   ☐ Board placement firms
   ☐ Diversity-focused organizations

4. PERSONAL NETWORKS
   ☐ Former colleagues
   ☐ University connections
   ☐ Community involvement
   ☐ Social connections

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PIPELINE STAGES:

Stage 1: AWARENESS (12-24 months out)
☐ Identified as potential fit
☐ Initial research completed
☐ Added to tracking list
☐ Monitoring for engagement opportunities

Stage 2: RELATIONSHIP (6-18 months out)
☐ Initial meeting held
☐ Mutual interest confirmed
☐ Ongoing touch points
☐ Learning about fit

Stage 3: CULTIVATION (3-12 months out)
☐ Deeper relationship
☐ Informal advice sought
☐ Company understanding developed
☐ Chemistry confirmed

Stage 4: READY (0-6 months out)
☐ Specific role discussed
☐ Availability confirmed
☐ Board chemistry tested
☐ Ready for formal process

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PIPELINE TRACKING:

Candidate: _______________________________________________
Source: _______________________________________________
Stage: ☐ Awareness ☐ Relationship ☐ Cultivation ☐ Ready
Expertise fit: _______________________________________________
Last contact: _______________________________________________
Next step: _______________________________________________
Notes: _______________________________________________

Pipeline Status Dashboard

Candidate	Source	Expertise	Stage	Last Contact	Next Step

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TRANSITION PLANNING

Director Transition Framework

DIRECTOR TRANSITION FRAMEWORK

OUTGOING DIRECTOR TRANSITION:

PHASE 1: DECISION (2-3 months before)
☐ Transition decision confirmed
☐ Timing agreed
☐ Replacement process initiated
☐ Transition plan developed

PHASE 2: COMMUNICATION (1-2 months before)
☐ Board informed
☐ Announcement drafted
☐ Stakeholder communication planned
☐ Thank you/recognition planned

PHASE 3: KNOWLEDGE TRANSFER (1 month before)
☐ Key relationships identified
☐ Handoff conversations scheduled
☐ Historical context documented
☐ Ongoing involvement defined (if any)

PHASE 4: COMPLETION (Departure)
☐ Final board meeting
☐ Formal resignation received
☐ Materials returned
☐ Exit interview conducted
☐ Thank you communicated
☐ Records updated

POST-DEPARTURE:
☐ Maintain relationship
☐ Periodic updates (if appropriate)
☐ Advisory relationship (if desired)
☐ Reference availability

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INCOMING DIRECTOR TRANSITION:

PHASE 1: SELECTION (3-6 months before)
☐ Candidate evaluation
☐ Reference checks
☐ Board chemistry meetings
☐ Terms negotiation
☐ Formal invitation

PHASE 2: PRE-START (1 month before)
☐ Background check
☐ D&O insurance arranged
☐ Onboarding scheduled
☐ Materials prepared
☐ Announcement drafted

PHASE 3: ONBOARDING (First 30 days)
☐ Welcome and orientation
☐ Historical materials review
☐ 1:1s with all directors
☐ 1:1s with executive team
☐ Deep dives on key topics
☐ Committee assignment

PHASE 4: INTEGRATION (First 90 days)
☐ First board meeting
☐ Committee participation
☐ Early value-add opportunities
☐ Relationship building
☐ Feedback collection

POST-INTEGRATION:
☐ Check-in on experience
☐ Address any concerns
☐ Optimize engagement
☐ Ongoing development

Transition Checklist

DIRECTOR TRANSITION CHECKLIST

OUTGOING DIRECTOR:

Administrative:
☐ Formal resignation letter received
☐ Board resolution approving departure
☐ Committee resignations processed
☐ D&O questionnaire updated
☐ Stock register updated (if applicable)

Materials:
☐ Board materials returned/destroyed
☐ Portal access revoked
☐ Email/communication access removed
☐ Confidential documents secured

Communication:
☐ Internal announcement (board)
☐ Internal announcement (company)
☐ External announcement (if appropriate)
☐ Investor notification (if needed)

Recognition:
☐ Thank you letter from CEO
☐ Thank you from board
☐ Recognition in meeting
☐ Parting gift (appropriate)

Exit Interview:
☐ Schedule conducted
☐ Feedback gathered
☐ Suggestions documented
☐ Relationship maintained

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INCOMING DIRECTOR:

Legal/Administrative:
☐ Board resolution electing director
☐ Indemnification agreement signed
☐ D&O questionnaire completed
☐ Conflict of interest disclosure
☐ D&O insurance confirmation

Onboarding Materials:
☐ Certificate of incorporation
☐ Bylaws
☐ Stockholders agreement
☐ Recent board materials (last 2-3 meetings)
☐ Committee charters
☐ Recent investor updates
☐ Annual operating plan
☐ Financial model

Meetings Scheduled:
☐ CEO onboarding session
☐ CFO finance deep-dive
☐ Product/strategy session
☐ 1:1 with each director
☐ 1:1 with key executives
☐ Customer/market briefing

System Access:
☐ Board portal access
☐ Email distribution list
☐ Calendar invitations
☐ Contact information shared

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SUCCESSION CALENDAR

Annual Succession Planning

ANNUAL SUCCESSION PLANNING CALENDAR

Q1: ASSESSMENT

January:
☐ Review current board composition
☐ Assess director engagement/value
☐ Update skills matrix
☐ Identify upcoming transitions

February:
☐ Strategic planning for board needs
☐ Update succession plan
☐ Review pipeline status
☐ Nominating committee discussion

March:
☐ Board discussion of composition
☐ Pipeline cultivation activities
☐ Independent director outreach
☐ Diversity progress review

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Q2: CULTIVATION

April:
☐ Pipeline relationship building
☐ Industry conference networking
☐ Candidate research
☐ Reference gathering (informal)

May:
☐ Pipeline candidate meetings
☐ Board chemistry opportunities
☐ Advisory board cultivation
☐ Update candidate tracking

June:
☐ Mid-year succession review
☐ Pipeline progress assessment
☐ Board discussion (if transitions planned)
☐ Q3 planning

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Q3: PLANNING

July:
☐ Annual meeting preparation
☐ Nomination process (if needed)
☐ Director term review
☐ Pipeline advancement

August:
☐ Candidate evaluation (if seat opening)
☐ Reference checks (if applicable)
☐ Transition planning (if applicable)
☐ Board discussion

September:
☐ Formal nomination process
☐ Annual meeting planning
☐ Communication preparation
☐ Documentation preparation

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Q4: EXECUTION

October:
☐ Annual meeting/elections
☐ New director onboarding (if applicable)
☐ Outgoing director recognition
☐ Transition completion

November:
☐ New director integration
☐ Committee assignments
☐ Next year planning
☐ Succession plan update

December:
☐ Year-end assessment
☐ Pipeline review
☐ Goals for next year
☐ Budget for director costs

Succession Planning Tracker

Director	Term Ends	Renewal Decision	Replacement Status	Notes

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SPECIAL SITUATIONS

Managing Difficult Transitions

DIFFICULT TRANSITION SCENARIOS

SCENARIO 1: UNDERPERFORMING DIRECTOR

Indicators:
☐ Poor attendance
☐ Lack of preparation
☐ Unhelpful contributions
☐ Negative dynamics
☐ Time unavailability

Approach:
1. CEO discusses with board chair
2. Chair provides direct feedback
3. Opportunity to improve
4. If no improvement, facilitate exit
5. Frame as mutual decision

Language:
"With your other commitments, it seems like
this might not be the right time for you to
serve on our board..."

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SCENARIO 2: INVESTOR DIRECTOR CHANGE

Triggers:
☐ Partner leaves firm
☐ Fund lifecycle
☐ Portfolio conflict
☐ Strategy change
☐ Performance issues

Approach:
1. Lead partner communication
2. Discuss replacement options
3. Negotiate new director (if applicable)
4. Transition planning
5. Relationship maintenance

Considerations:
☐ Board seat attached to investment
☐ May lose seat entirely
☐ New person may be less valuable
☐ Relationship continuity

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SCENARIO 3: FOUNDER/CEO TRANSITION

When CEO changes:
☐ Outgoing CEO typically leaves board
☐ May stay during transition
☐ Rarely stays long-term
☐ Exception: move to chair role

Approach:
1. Clear expectations during hire
2. Transition timeline defined
3. Formal role change
4. Ongoing relationship (if healthy)

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SCENARIO 4: URGENT VACANCY

Causes:
☐ Sudden departure
☐ Health issue
☐ Death
☐ Conflict of interest
☐ Legal matter

Approach:
1. Assess urgency (can board function?)
2. Activate pipeline immediately
3. Consider interim solution
4. Accelerated search process
5. Document lessons learned

Interim Options:
☐ Board observer
☐ Advisory role
☐ Smaller board temporarily
☐ Emergency appointment

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Quick Reference: Which Resource for Which Challenge

Challenge	Recommended Resources
"New to board management"	#357, #370, #371
"Board deck preparation"	#358, #359
"Investor communication"	#360, #363, #364
"Building the board"	#361, #376
"Cap table complexity"	#365, #366
"Crisis with board"	#372

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Every resource built to the Human Standard. Every resource designed to build productive board relationships.