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Who Can Appoint a CEO? A Non-Executive's Guide

Do you need to replace a retiring or leaving CEO?

It’s a big task, but with the right guidance, you can find that perfect new CEO for the business. But before you begin the process of hiring a CEO, you need to know who’s going to be in charge of it all. Who’s going to take the reins and set out to find the best possible CEO for the business at hand? Let’s take a look!

The Chairman Should Take Charge

So who can appoint a CEO? It’s worth noting straight away that the responsibility of hiring a CEO almost always falls in the hands of the Board of Directors. More specifically, the Chairman of the board often takes control of overseeing the process and ensuring the right hire is made in the best interests of the business at hand.

But this doesn’t mean the chairman should be the only responsible party for the CEO selection process. Generally, the recruitment process is taken on by the board as a whole, though the specifics vary from board to board.

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Other Options

There are, of course, other options available. The right choice essentially depends entirely on the nature of the board, business, and CEO role.

In addition to board members, you may also want to seek assistance or input from senior management in the business itself.

It’s worth remembering that as board members, you’re more separated from the business than the senior management within. This means that senior management members could provide valuable input and assistance during the recruitment process due to their involved nature with the CEO.

You can consider whether to involve senior workers such as the HR Director, Associate Director, or other Partners. They may have some valuable knowledge and guidance that could lead you to the right candidate.

Consider who was involved in the last CEO recruitment process. If you’re pleased with the current CEO, it’s worth getting those involved previously in the upcoming process. This may be yourself, other board members, or veteran senior management within the business.

Everyone Plays Their Part

Ultimately, the decision of who to hire as your new CEO will always be a joint one. The more people with some input as possible, the more secure your final decision is. But at the same time, you don’t want too many people hands-on in the actual process. Too many cooks spoil the broth, as they say!

Remember that you want to keep all shareholders as happy as possible, so total clarity and discussion is a must. This decision can’t be taken lightly.

Essentially, you should sit down with the entire board and any necessary business partners and outline exactly who is going to play what part. Everyone needs to know their involvement before you get started to ensure the process goes as smoothly as possible.

The standard method of CEO recruitment involves a multi-staged interview process with different levels of involvement for each stage. The first interview is usually conducted by the headhunters or executive search consultant, assuming one is used. This is to effectively screen potential candidates for quality before submitting them to the board.

The second stage would usually involve the candidates being interviewed by the key individual in charge of the recruitment process. Who this is depends on the board and who’s deemed to be the most capable, knowledgeable individual.

The last process usually involves an interview with the rest of the board members. This is to ensure that the entire board agree that the right candidate was selected, and that there was no unfair bias involved in the selection process. This is a vital stage in the CEO selection process.

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Constant Reporting

One of the most important things to do, regardless of who’s taking charge of the CEO recruitment, is keep in constant contact with other board members. Remember that you should always act in the best interests of the business, and to do so you need to be as unbiased and fair as possible. To ensure this, constant reporting and updates with the board are essential.

Whether it be physical board meetings, conference calls, or simply a group email, everyone should be in touch throughout the whole process. Think about ways you can standardise the reporting process, for example, weekly updates or conference calls.

Internal vs External

One of the biggest decisions you’ll make during this process is the decision between recruiting internally or externally. Even though these processes are very different from each other, the decision between the two strategies shouldn’t change the decision of who appoints the CEO. This is why determining who’s going to be involved should be the first thing you do.

Both internal and external recruitment require strong knowledge of the business and the employees within in order to find the most suitable candidate. The individual in charge of the recruitment drive will need to have an excellent knowledge of the business and its operations, environment, culture, and so on.

Recruiter Input

So say you’ve decided to work with a recruiter or headhunter. What involvement do they have in appointing the new CEO? Well, the answer is…It depends.

Yes, different types of recruitment options will offer different levels of involvement, so choose the one that’s right for you.

Standard recruiters will usually offer less hands on involvement in the appointing process. Essentially, they’ll take your job description, find large selection of candidates who are actively looking for new work, and submit this list to you. At this point, it’s up to you to carry out the selection and interviewing processes.

However, standard recruiters aren’t ideal for CEO recruitment in most cases. Their service, while cheaper, is usually not detailed enough to find the best CEOs, and this is something you simply can’t compromise on.

On the other hand if you’re working with headhunters, or executive search firms, they will have much more involvement in the selection process. Headhunters are more involved in actively seeking and holding discussions with candidates who aren’t actively looking, before submitting a selection of the most relevant ones to you as a shortlist.

They can often offer involvement in the interview and final selection processes at this point, meaning you have assistance and useful input throughout the entire process. It’s often very helpful having this third party to help you determine who the very best candidates are.

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No Matter What, Plan Ahead

Regardless of what you’re going to do, plan, plan, and plan some more. One of the most common factors in recruitment failure is a lack of solid planning. It’s unfortunately common to think that the recruitment process can just be dealt with when the time comes. Most of the time, this doesn’t work. You need to know what you’re doing, or your process of hiring a CEO will be directionless.

We’ve created a free downloadable workbook to help you plan your CEO recruitment journey. The workbook contains the main things you need to consider and keep note of as you start the process, and it can be downloaded below.

Review Your Recruitment Strategy

Ask yourself what your current recruitment strategy is. Has it worked in the past? Could it be better? 

The chances are, your strategy could use some improvement. No one recruitment strategy is perfect. Good practice for recruitment varies so much depending on business, industry, state of the market, candidate availability, talent shortage, and much more.

There’s so much to factor in that reusing the exact same recruitment strategy over and over again is a poor decision. Recruitment changes so quickly, your strategy needs to adapt and evolve to keep up.That’s why headhunters are ideal for recruitment of this level.

Headhunters employ a unique, bespoke recruitment process for every project, meaning there’s no reuse of the same old techniques and strategies. Quality headhunters really take account of the current industry and market to find you the best candidates.

Headhunting for CEO Roles

Essentially, if you’re looking to recruit externally for senior roles like MD and CEO, the only way forward is headhunting.

More standard forms of recruitment often just don’t provide enough depth and detail to find the best candidates at senior levels.

Headhunters operate at senior level and specialise in conducting extremely thorough talent searches for the role. Simply put, the low quality of candidate that standard recruitment produces, along with the ‘catch-all’ nature, means standard recruitment just isn’t a viable option for roles of this level.

In Summary

So who should you appoint to take the lead in your CEO selection process?

  • First and foremost it’s vital that you select individuals from the board of directors who have an excellent knowledge of the business and the CEO role as a whole.
  • It’s important to involve as many board members as possible to ensure the recruitment process is well-rounded and fair. As board members, it’s important to remain free from bias when hiring a CEO.
  • You may want to include experienced senior management members from within the business. This includes those with a strong knowledge of the CEO role such as HR Directors, Sales Directors, and Partners/Associate Directors.
  • Planning and reporting is essential to a successful CEO recruitment strategy, regardless of who is taking charge

For external CEO recruitment, headhunters are the way to go if you want to find and attract the very best senior candidates.

Why use Executive Headhunters? & What does is cost?  FREE eBOOK A Guide to understanding how headhunters work and the fees involved  We understand the frustrations associated with recruiting at executive level  and for technical positions or senior roles. Download our FREE guide for a  detailed insight on the journey you are about to begin. Simply complete the  form below and download our guide DOWNLOAD NOW!

 

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