Chief executive officer selection and succession planning are among the most important responsibilities for any board of directors. In fact, some business writers will go so far as to say, “choosing the next CEO is the single most important decision a board of directors will make.” In the ever-changing corporate landscape, CEOs will come and go, which is why it’s important for boards to create a reliable process for how to hire a CEO for the organization they serve.
Most board members will tell you that finding and hiring the right CEO is a tall order. Directors know that a CEO’s influence and legacy can be felt for years after their departure—in both positive and negative ways, depending on the situation.
If the exiting CEO is merely retiring or moving on to another opportunity on good terms, it’s sensible to involve them in the hiring process. No one will understand the demands of the position quite like someone who has recently experienced them.
If the board lacks confidence in the CEO, though, the lead director should take charge of the process.