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In today's rapidly evolving business landscape, boards of directors are more than just stewards of governance—they are the strategic compass guiding an organization toward enduring success. As the challenges facing companies grow increasingly complex, from disruptive technological trends to shifting societal expectations, the board's role has never been more critical.  

This series is designed to empower board members with the insights and tools necessary to navigate change with confidence. Our experts, each a leader in their respective fields, will share real-world examples, practical frameworks, and actionable advice in a Q&A format, as well as lessons learned from their personal and professional journeys.   

Succession planning and developing future leaders

For the latest installment of our board leadership series, BerryDunn Director of Executive Recruiting, Sarah Olson, shares key insights on leadership transitions, including identifying high-potential employees, offering internal leadership development, and prioritizing the development of a strategic succession plan. 

Q. What do you consider the most critical elements of a successful succession planning strategy for leadership roles? 

A. There are several elements to succession planning, and the first one is clarity—being clear about how you want people to perform in your organization. You want to be consistent when eyeing possible internal candidates for leadership roles, and you want to make sure that you are developing them for future success.

Once you identify a potential successor for a leadership role, you want to make sure that you look at the skills they have today that they will need to take on that next-level role. You want to make sure you have the training, coaching, and mentoring in place to allow that person to grow into the role. The employee also needs to have a clear understanding of where the organization is going because if we just look at people to take over roles as of today, as opposed to the future, then you are not going to have the skill set that will allow the organization to grow.   

Finally, you must plan. It takes thoughtful discussions, and often it requires outside consultants to assist and keep you on track. It's easy to get caught up in the day-to-day of the organization and think that this is just going to happen without any pre-planning. But that's not true. It requires a solid plan to get you where you want to be. 

Q. In your experience, what are the biggest challenges companies face when preparing for leadership transitions, and how can they be mitigated?  

A. Planning. Leaders might know they want to grow the organization, but they don't always have the road map to get there, and succession planning for that growth is a key element. You need to sit down and be willing to talk openly about what this is going to look like from a transition standpoint. As an example, let’s consider an organization that unexpectedly loses its longtime CEO and has no succession plan in place. Not having someone marked to take over such a critical role is a huge disruption. As a result, they find themselves unable to make decisions that should have been addressed long ago. This puts the organization in a difficult position, and it will take time to move forward because no prior planning or consideration was done. It’s exactly the kind of scenario an organization should avoid—major transitions need intentional, proactive planning. 

Q. How do you assess and prepare internal candidates for C-suite readiness while maintaining confidentiality and minimizing disruption?  

A. It’s a struggle because not everyone is suited to take on that next-level role. Sometimes people reach a ceiling, but they may think that they can do more. Organizations must be clear about expectations, development, and skill sets—both current skills and gaps. If you are looking at an internal candidate for a potential leadership position in the future, you have to understand where they need to grow and tailor a growth plan for them through stretch assignments and training. You must be transparent about what you're doing. If someone is thinking that they're going to be taking on a leadership role, but they really don't have the skill set to do so, you need to be open to having conversations with them about those gaps. This includes sharing how they match up against others, without naming names, and making sure they understand what they must do to get to that next-level role, and whether they are even capable of it. You have to be realistic with them. These are difficult conversations, which is why most people avoid them. If you're not honest up front, it can cause angst and resentment down the road. 

Q. How do you identify and develop high-potential employees for future leadership roles without creating perceptions of favoritism or exclusivity?  

A. You need to be transparent and upfront about their capabilities, as well as where they need to grow and if they need training. Giving them a stretch assignment and analyzing their reaction can tell you a lot. If they really struggle with the assignment, you can have that conversation. You can explain that you are looking at everyone's capabilities, and this project didn't go as expected, which tells us that you're not ready yet. Here, you can offer the employee feedback on what they need to do to reach the leadership level. 

Q. In your experience, how can organizations balance the need for external executive hires with the development of internal talent pipelines?  

A. You need to really go back to your awareness of people's capabilities. If you don’t have anybody in the organization that can fill the vacant leadership role, and if you’ve never made a succession plan, then you need to view it from a recruiting standpoint. What’s the pipeline out there for talent for C-suite positions? Leaders in an organization can start by networking with others in the industry, with an eye for potential talent for the future.   

You need to always look towards that future vision, making sure that you're networking early and often. You've got to think deeply about whether you've done your succession planning. If there is no one that you're seeing who you can tap to take on that role, no matter how much development you do with them, it’s time to look externally.  

Q. What role does mentorship or coaching play in effective succession planning, and how do you structure those programs for impact?  

A. Coaching and mentoring play a significant role in most employees’ development. How do you help them become their best selves and advance their careers? Growth can’t rely solely on external training or earning additional degrees. It also comes from observing and modeling the behaviors of others—whether leaders or colleagues who have done the work before. You can’t overlook the skills, knowledge, experience, and education people already bring to the table. 

It’s especially frustrating when a long-term employee leaves and, when asked about their replacement, you discover that little to no effort was made to capture that person’s organizational knowledge. Too often, their expertise wasn’t transferred to anyone else. When they walk out the door, their institutional knowledge disappears with them. While starting fresh isn’t always a negative, in many cases, it forces the organization back to square one, requiring more time and effort. With proper foresight, that knowledge could have been captured, documented, and shared to make the transition seamless. 

Q. What strategies do you use to ensure succession plans reflect the organization’s long-term strategic goals and evolving leadership competencies?  

A. There needs to be alignment with your strategic plan. If you haven't executed a strategic plan, you need to make sure that you create one so you grow in the right direction. You want to make sure that the right people have the right skill sets for that growth. Succession planning should link directly to the organization's mission. Vision and strategic priorities can't be separated. Watch for methods used to anticipate future leadership needs, including emerging skills, leadership styles, and industry trends. You want to know where other organizations in your industry are headed and what tools they are using. What people are they tapping into? What new services are they offering? Make sure that your development program is solid and that it contributes to finding strong leaders in your organization. Have a robust mentoring program and training opportunities, and make sure that you're identifying those high-potential employees and have a conversation with them about the future. This is important because you don’t want a high-potential employee to leave thinking there is no future growth for them at the organization.  

Also, look for ongoing evaluation methods of talent reviews, performance metrics, and feedback loops that are going to ensure that your succession plan remains relevant over time. You're always going to be looking at that plan and updating it. Adaptability is also important. You have to stay relevant, making sure that you're changing over time to fit the needs of the organization today and in the future. 

Q. How do you measure the effectiveness of succession planning efforts in terms of leadership readiness, retention, and organizational resilience? 

A. It's important to track the number of key positions with at least one successor identified. You need to very succinctly look at each position and determine who your high-potential employees are for that role. Evaluate those successors through performance reviews and feedback loops, doing assessments and simulation exercises, such as what-if scenarios. Examine how often an internal candidate is successfully promoted to a leadership role compared to filling it with an outside candidate. From a talent management perspective, you want to keep a healthy balance between the two.  

Measure retention and consider your turnover rate, as well as what is causing it. What needs to be adjusted? Make sure that you know where all your employees stand, that your high performers know they're high performers, and that you're having conversations with them to let them know how valuable they are.  

The resiliency of an organization is another big piece. It’s essential to make sure that the organization can adapt to unexpected changes caused by departures or role transitions. You don’t want a change to cause a panic situation; you want to be prepared for the unexpected. 

Q. Looking ahead, how do you see succession planning evolving in response to changing workforce demographics and leadership expectations?  

A. Succession planning is becoming more strategic and forward-looking. Organizations are increasingly recognizing that failing to plan creates significant challenges. They must prioritize diversity, skills, and potential—not just tenure. A shorter-tenured employee can still be a high-potential performer who brings valuable perspectives. In fact, the two-year employee may be a stronger leadership successor than someone with 30 years in the organization, depending on their broader experience and background. Length of service alone shouldn’t be the determining factor. The workforce itself is shifting: the population is aging, and fewer young workers are entering the pipeline. Organizations must stay laser-focused on what this means for their future and for their industry as a whole. 

It’s also essential to be clear about your organization’s values, especially at the board level. Boards can’t sit passively and assume the organization will take care of everything—they need to ask thoughtful, informed questions to ensure long-term stability, success, and readiness. The more intentional the planning, the stronger the organization becomes. Boards should be accountable for understanding and overseeing the organization’s critical processes. 

About Sarah

As Director of Executive Recruiting, Sarah partners with clients to create high-impact leadership teams that support an organization’s mission and culture. Drawing from more than two decades of recruiting experience and a large network of professionals, she has the knowledge and resources to help connect clients with the best talent for their specific needs. Learn more about Sarah. 

BerryDunn partners with organizations to create work environments where business success and personal growth coexist and where people are confident knowing their workplace positively contributes to their well-being. We take a comprehensive approach to our workforce and well-being work, considering how business needs, organizational capacity, and the employee experience work together to drive your business forward. That’s why we initiate each executive search by learning our client’s values—allowing us to find a candidate who shares those values while also meeting technical qualifications. Once we understand a client’s culture and business demands, we go beyond the pool of “available” executives and turn to our deep resource network to find the ideal candidate. Learn more about our executive recruiting team and services. 

Rolling out new software isn’t just clicking “Install” and calling it a day. It’s more like planning a wedding. There’s the venue (servers), the guests (users), and yes, the unexpected costs that show up like distant relatives. In today’s digital-first world, implementing software is a strategic investment that can boost efficiency, strengthen compliance, and support long-term growth. However, the true cost goes beyond the sticker price on that shiny new platform. For nonprofits operating on limited budgets, careful planning is essential to avoiding hidden costs when making a technology upgrade. 

What are software implementation costs? 

Software implementation costs include all expenses tied to integrating a new system into your organization’s operations. Whether it’s internally developed software, purchased solutions, or a cloud-based platform like SaaS, these costs vary based on complexity, company size, and scope.  

Where do hidden system implementation costs hide? 

Here’s the short answer—everywhere. The long answer? They lurk in: 

• Licensing and subscriptions: These are the more obvious places where costs can surface.

• Customization and configuration: "Out of the box” rarely fits perfectly, which often means additional work. 

• Integration with existing systems: Getting your new system to work with your existing systems can be challenging. 

• Data migration: Moving years of data is complicated and time-consuming. 

• Training and change management: Much time and effort go into getting users up and running on the new system. 

• Testing and post-launch support: Planning and getting support can sometimes lead to additional costs based on what you uncover. 

These costs stretch across phases—planning, development, testing, deployment, and post-launch support. If you’re not tracking them, your budget might feel like a magician’s hat: costs keep popping out of nowhere. 

Accounting for these hidden costs 

Here’s where the rules come in. According to Financial Accounting Standards Board (FASB) guidance (ASC 350-40, Accounting for Internal-Use Software), you need to separate costs that can be capitalized from those that must be expensed. 

• Capitalize: Development-phase costs like coding, testing, installation, and direct labor. These go on the balance sheet and get amortized over the software’s useful life. 

• Expense: Early-stage activities (e.g., feasibility studies, vendor selection), post-implementation efforts (e.g., training, maintenance), and general overhead. These hit your bottom line immediately. 

Materiality can also be considered. Smaller costs may be expensed for simplicity. 

Why hidden software implementation costs matter to nonprofits 

Software implementation costs aren’t just accounting trivia; they’re the difference between a smooth upgrade and a budget wedding. In today’s digital-first world, knowing which costs to capitalize and which to expense isn’t just good practice; it’s essential for keeping your financials clean and your auditors happy. Think of it like planning a wedding: some items are lasting investments—like the photography and rings (capitalized), while others are one-day details, like flowers or catering (expensed). When in doubt, lean on the pros—your accounting team and trusty guidance like ASC 350-40. Treat these costs like the strategic investment they are and your balance sheet will be better for it. 

BerryDunn can help 

The right system can help your organization increase efficiencies, reduce risk, and make informed, data-driven decisions. Implementing a new system is a critical decision with significant business impacts. BerryDunn’s team can provide assessment, system evaluation, and implementation services for ERP systems for nonprofits, such as financial and student information systems, and can expertly guide you through the process. Learn more about our services and team.  

In healthcare, coding compliance isn’t just about accuracy—the true why behind it is to protect integrity, revenue, and trust. When hospitals and health systems need to develop an internal coding compliance audit plan, it’s important to focus on education, building a culture of accountability, and accuracy. Starting with the why will help staff understand the importance of proactive auditing. It’s far better to identify issues internally than to discover them during an external review. 

Assess your coding compliance process

After connecting staff and leaders to the “why” of proactive coding audits, assess current processes by asking: 

• Where are the gaps?

• Are coders supported with regular education?  

• What topics have been covered?  

• Is the education provided by an accredited source? 

• When are the audits conducted (monthly, quarterly, yearly)? 

• Are the audits conducted internally or from a vendor? 

• Has a clear baseline been established to make it easier to design an effective, realistic plan? 

Key ingredients for a good audit plan 

Every good audit plan should define the what, how, who, and why: 

• What services will be audited and why? 

• How often will audits be conducted and what triggers expanded audits?  

• How will results be communicated with staff? 

• Who is responsible for implementing corrective action plans? 

• Why is this audit being conducted? (Is it based on payer denials or has an internal issue been identified?) 

Corrective action plans and oversight

While conducting audits and reporting findings is essential, it is equally imperative to implement documented, corrective action plans to ensure that any identified deficiencies are properly addressed and resolved. Throughout this process, establishing a strong partnership with the revenue cycle team can be invaluable, especially for managing rebilling, processing refunds, or addressing charge master discrepancies.  

This collaborative approach helps drive meaningful improvements and supports the overall integrity of the organization’s compliance efforts. Once corrective action plans are in place, ongoing monitoring is crucial to verify their effectiveness and to ensure that identified issues do not recur. Continuous oversight not only validates the success of corrective actions but also reinforces a culture of sustained compliance and accountability. 

Strengthen your organization with an audit plan

In the Health Care Compliance Association’s® 2025 Healthcare Industry Compliance Staffing & Budget Benchmarking Survey, more than half of publicly traded healthcare organizations reported annual compliance budgets of $1 million or more—reflecting the investment being made in compliance functions, which typically includes audits, monitoring, etc. This seems like a hefty budget, but the key here is scalability. Healthcare organizations across the care continuum, regardless of size or tax status, should focus on developing a reasonable, risk-focused plan. 

Remember, an audit plan isn’t a one-time project. It’s an ongoing process that evolves with regulatory and payer policy changes, new technology implementations, and organizational growth. Even more important than adapting to these changes is fostering a non-punitive culture. The goal isn’t to assign blame; it’s to strengthen accuracy, compliance, and confidence across the organization. 

BerryDunn can help

BerryDunn’s healthcare compliance team includes experts in coding, auditing, clinical documentation improvement, and revenue integrity. We can assess or develop your organization’s coding compliance audit plan, perform regular audits, and provide coder or provider education. Reach out to learn more about our team and services.  

The affordable housing landscape in the United States is on the cusp of significant change with the introduction of the Renewing Opportunity in the American Dream (ROAD) to Housing Act of 2025. For nonprofit organizations operating in the affordable housing sector, this proposed legislation brings both new opportunities and important considerations. Here’s what you need to know. 

What is the ROAD to Housing Act? 

The ROAD to Housing Act is a comprehensive bill designed to increase the supply of affordable housing across America. It addresses barriers to housing development, modernizes regulatory frameworks, and introduces new funding and incentive programs. The Act is broad, touching everything from financial literacy to manufactured housing, disaster recovery, and homelessness reduction. 

Key provisions affecting nonprofits 

Expanding housing supply and streamlining development: 

• Rental Assistance Demonstration (RAD) expansion: The Act extends and enhances the RAD program, allowing more public housing units to convert to long-term, project-based Section 8 contracts. This is a major opportunity for nonprofits to participate in preservation and redevelopment projects with more stable funding streams. 

• Incentives for building in opportunity zones: HUD may give priority to grant applicants serving Opportunity Zones, potentially increasing funding access for nonprofits working in these areas. 

• Whole-Home Repairs Act: Grants will be available to nonprofits and local governments to repair and rehabilitate homes for low- and moderate-income homeowners and small landlords, with a focus on accessibility, safety, and energy efficiency. 

Regulatory reform and local zoning: 

• Housing Supply Frameworks Act: The Act directs HUD to develop best practices and guidelines for state and local zoning reforms, encouraging the reduction of barriers such as restrictive zoning, parking minimums, and lengthy permitting processes. Nonprofits may find it easier to develop affordable housing as localities adopt these reforms. 

• Streamlined environmental reviews: The Act simplifies environmental review requirements for certain HUD-funded activities, which could reduce project timelines and administrative burdens for nonprofit developers. 

Manufactured and modular housing: 

• Modernization and parity: The Act updates definitions and standards for manufactured and modular homes, aiming to expand their use as affordable housing solutions. Nonprofits may see new opportunities to develop or manage these types of housing, especially in rural or high-cost areas. 

Funding and grant programs: 

• Innovation Fund: Competitive grants will reward localities that demonstrate measurable increases in housing supply, with eligible uses including infrastructure, planning, and direct housing development. Nonprofits may partner with local governments to access these funds. 

• Community Investment and Prosperity Act: Expands the ability of community development financial institutions (CDFIs) and nonprofits to support affordable housing and community revitalization. 

Homelessness and supportive services: 

• Reducing Homelessness Through Program Reform: The Act streamlines and enhances funding for homelessness prevention, rapid rehousing, and supportive services, with a focus on coordination between housing and healthcare providers. Nonprofits specializing in these services may benefit from increased flexibility and resources. 

Opportunities for the affordable housing industry and nonprofits 

• Increased funding and flexibility: More grant programs and streamlined regulations mean nonprofits can access new resources and deliver projects more efficiently. 

• Partnerships and collaboration: The Act encourages partnerships between nonprofits, local governments, and private developers, especially in Opportunity Zones and through RAD conversions. 

• Focus on preservation: Emphasis on repairing and preserving existing affordable housing stock aligns with the missions of many nonprofits. 

Challenges for the affordable housing industry and nonprofits 

• Compliance and reporting: With new funding streams come new compliance requirements, especially around performance measurement, reporting, and public accountability. 

• Capacity building: Nonprofits may need to invest in staff training and systems to take advantage of new programs, particularly those involving modular/manufactured housing or complex financing. 

• Local adoption of reforms: Many benefits depend on state and local governments adopting HUD’s recommended zoning and permitting reforms. Advocacy may be needed to ensure these changes are implemented at the local level. 

What should nonprofits do now? 

• Stay informed: Monitor the progress of the ROAD to Housing Act and related HUD guidance. 

• Assess readiness: Evaluate your organization’s capacity to participate in new grant programs or RAD conversions. 

• Engage locally: Work with local governments to advocate for zoning and permitting reforms that will unlock new development opportunities. 

• Build partnerships: Explore collaborations with other nonprofits, CDFIs, and public agencies to maximize impact. 

The importance of the ROAD to Housing Act 

The ROAD to Housing Act represents a significant federal commitment to expanding affordable housing and supporting the organizations that make it possible. Nonprofits in the affordable housing sector should prepare to leverage new opportunities, adapt to evolving compliance requirements, and continue their vital work in building stronger, more inclusive communities. 

BerryDunn can help 

We understand that affordable housing organizations are unique and dynamic organizations with specific challenges and opportunities. Our commitment to specialization provides our clients with a team of specialists who understand the complex accounting, regulatory, and tax issues of affordable housing organizations. We have experience with affordable housing agencies subject to audits under both FASB and GASB, as well as the various tax credits available, HUD compliance, annual Real Estate Assessment Center (REAC) submissions, and other compliance matters. Learn more about our team and services. Reach out to discuss how your organization can prepare for the upcoming changes. 

Read this if you are a CEO, CFO, or COO at a Federally Qualified Health Center (FQHC). 

This article is the second in a three-part series to help FQHCs understand how site- and program-specific accounting is essential to sustainability. Next up: Gaining operational insights on programs and sites from your data.

Site- and program-specific accounting can be a lifeline to FQHCs struggling with sustainability by providing a more granular look into operations. This approach allows an FQHC to gain key insights into the performance of its programs and sites and use those insights to make data-driven decisions to improve operations. To implement this method, an FQHC must set up its general ledger (GL), payroll, and Electronic Health Record (EHR) systems to report at the appropriate level of detail so that data flows cleanly into its accounting system. 

Step 1: Restructuring your general ledger 

The first step is to fine-tune the GL. This requires defining all programs and sites in the GL and creating processes for identifying expenses so that you can begin to record them accordingly. Programs and sites need to be set up to include a general administrative program, along with a mechanism to ensure those administrative costs are coded into that cost center. It’s imperative to establish a consistent allocation method for applying those overhead costs to the respective programs and sites. This will give you the gross margin for each program and site. Overhead costs, which are generally fixed, must also be factored in to give a view of your bottom-line profitability. 

Having this level of insight into programs and sites gives FQHCs a clearer view to determine strengths, weaknesses, and opportunities for maximizing efficiencies and operational effectiveness. This data helps an FQHC model what is possible and make informed operational decisions. 

Step 2: Modifying your payroll data 

Next, an FQHC must adjust its payroll system setup. Payroll data is typically exported to generate journal entries for recording in the GL or is uploaded directly to the GL. The same principles for identifying programs and sites apply to payroll. While the GL is the easiest route to refining payroll setup, an entity may not be able to define sites due to limitations on the number of labor distribution elements in its payroll system. Another option is to export payroll data into Excel and use lookup tables that denote an employee’s role (i.e., medical provider, dental provider, behavioral health provider) and location, so that their salaries can be assigned to the appropriate program and site. Using the Excel spreadsheet, an FQHC can generate a journal entry by site and program and then upload it to the GL. This is often the easiest and most effective method.  

If an entity has a payroll system that can be defined at this level of site- and account-specific detail, that is another possible route. However, this approach requires significant upfront and ongoing resource commitment, and many smaller entities do not have the bandwidth to dedicate staff and time to configure and maintain the system, which often makes it impractical. 

Step 3: Setting up your EHR 

The third step is to record patient service revenue by program and by site. This requires structural adjustments within the EHR system to clearly define programs and sites. Once set up, EHR reports can be exported to generate revenue entries that are uploaded to the GL. Expenses can be viewed by program and site, indicating profitability and providing visibility into the ROI of providers. Looking at patient revenue less direct expenses serves as a good measurement tool.  

How much data is enough? 

With processes in place and systems modified appropriately, an entity can start measuring profitability with a greater level of detail. When generating financial statements for the month, additional income statements by program and site should also be produced, which makes viewing data monthly a good starting point.  

A month’s worth of data helps an entity uncover if one site or program is excelling, or others are underperforming or have higher costs. A closer look can reveal how success in one program might be replicated in others, or how a high-performing site could be masking the failure of another site. Site- and program-specific accounting supplies the data needed to support key decisions related to programs and sites.  

About BerryDunn 

Faced with rapid changes in an increasingly competitive environment, community health centers rely on our seasoned professionals to refine business strategies, streamline operations, and introduce proven best practices to enhance performance while managing costs. Our team works with a comprehensive range of community health providers, including FQHCs, FQHC Look-Alikes (LALs), and Rural Health Clinics (RHCs). Learn more about our team and the services we provide.