Laying a Foundation for Effective Succession Planning

Source: Public Practice

In this article, Bill Reeb, of the Succession Institute, challenges some common "misdirections" in recent advice columns regarding succession planning. Often, authors' top priorities include issues such as developing future leaders, buying out senior owners, determining who should manage the firm, client transition, partner retirement dates, and compensation arrangements for retired owners.

All of these issues are important, but Reeb urges firms to "stop focusing on symptoms and start focusing on resolving root cause issues that a good succession plan should address." In this first column of a series, Reeb outlines his Robust Succession Framework,TM which provides a checklist of items that form the foundation of a good CPA firm business model and, therefore, a good succession plan. "Good succession management," Reeb explains, "is a function of good business operating practices."

The list covers best practices in the following areas:

• Planning;
• Compensation systems;
• Governance, compliance, roles and responsibilities;
• Succession;
• People development;
• New owners; and
• Standard operating policies and procedures.

In his next column, Reeb will discuss foundational issues in building an effective succession plan.

For the complete article, read "Managing Succession Fundamentals -- Part 1."

From Public Practice, Texas Society of CPAs, December 2012, www.tscpa.org.