What is a “Succession Plan”??? Simply, it is the “plan” for who takes over and what happens to your assets when you retire or are no longer able to run your business.
Why do you need a plan? Because accidents, illness, and employee turnover are an unfortunate part of business life, and your employees need to know what comes next in the event that you or a key manager are no longer able to perform your usual duties.
In the event of illness or accident, these plans are usually laid out in personal Power of Attorney instructions or in the Final Will, but sometimes there is a need to have company functions looked after much sooner than the reading of formal documents allows for, especially in smaller organizations.
In the event of employee turnover, the organization needs to ensure that there is someone in place who can step into the role, and that vital information such as contact and password information for banking and government reporting sites is not lost. You also don’t want to compromise your organization by having only one person in control of the information-what happens if they suddenly quit?
Trying to change these accesses can be very time consuming and troubling if there isn’t a second, or even third, person with this information and authority.
So, what do you do?
1. Create a manual that will explain which position(s) in your organization report to which people, and which position would step in in the event that a sudden vacancy occurs. For example, you could state that all Sales Reps report to the Director of Sales, but should the Director of Sales position be vacant or unavailable, Sales Reps would report to the Company VP or other suitable position until the Director’s role is filled.
2. Create a log of all important contact and password information: from the restaurant you order your sandwiches from, to the CRA payroll account passwords, this is the stuff that is vital to your organization and most often overlooked!
3. Ensure that the vital information is kept secure and share as much of the Plan with your employees as you can, so that everyone knows what’s going on and where to find the information if they should need it.
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