Boards must take CEO search more seriously
L e a d e r shi p
Here’s how boards can make better outcomes from CEO search committees
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By Dr. M Muneer & Ralph Ward
O
ne of the major headaches for the board of directors has always been putting a succession plan for the successful running of the enterprise it serves. Ensuring leadership stability by replacing an existing CEO with a capable successor is always on top of the agenda every few years. Let’s just say the time has come to consider leadership change in the company. Perhaps it is part of a planned succession. Or, maybe the CEO is retiring, or he or she just surprised the board with a new “opportunity” (or maybe the incumbent CEO “just didn’t work out”). Let us assume that the choice of a new chief is not a done deal and that the board wants to do a | APRIL 2021
proper job of the succession. That means designating a board “CEO search committee.” How good are boards in doing CEO search? Remember there have been many failed attempts even by blue chip boards. Have you forgotten Tata Sons, Infosys, and many others? Here’s how boards can make better outcomes from CEO search committees. For starters, designating a distinct committee of the board to manage chief executive search offers many advantages over an ad hoc or full board approach. It shows good governance – you are telling investors and employees that sound CEO succession is a board
priority and that it will be handled properly. Membership can be handpicked to assure board members with time, expertise, and independence for the task. And the board can write a charter for the committee that spells out timelines, priorities, and role of the committee versus the full board (and you can set a discrete budget line item for its needs). Keep committee size compact – 3 or 4 members. A big search committee proves both political and unwieldy. Evaluate if it is good to add the CEO succession agenda into the portfolio of an existing committee. It has its own advantages. Since the tasks and needs of
