When appointing a new CEO, set your timelines and keep to them.
Appointing a CEO is a critical governance task which frequently is handled poorly. Even at the outset, critical mistakes can be made unless time management skills are applied by the Board to the recruitment process. The Board needs to have a very clear idea of the time likely to occur before a new CEO will commence (including the notice period for the successful candidate to give another employer), then to be disciplined about keeping on schedule for the completion of the necessary tasks within that period. (An executive search consultant is an asset in that regard).
The answer to what amount of time will be needed will vary from organisation to organisation and be affected by such factors as the person (s) involved in leading the recruitment process, the particular technical knowledge required of candidates, the organisation’s reputation/viability and/or a location to which it is known to be difficult to attract suitable senior people. (Don’t assume appointing a search consultant will lengthen the process as s/he will have experience in handling such challenges).
Whatever the organisation’s circumstances, the first mistake to avoid is the lack of discipline that allows timeframes to blow out. Appoint an Acting CEO, or a General Manager if the Board does not feel confident in delegating certain matters. Agree with the interim person on the period for which s/he will have responsibility and any change in terms and conditions of employment for this period. Again, by agreement, you may extend this period if necessary, but not indefinitely! Acting CEOs will generally feel that they are in ‘caretaker mode’ which will impact their reputation to be a ‘real’ CEO the longer the appointment process drags on, even more so, if the Acting CEO is an applicant. (Unsuccessful internal candidates may be lost to the organisation altogether, but the likelihood is increased if the handling of their time as an interim executive is handled poorly).
Of equal importance in securing your preferred candidate is not allowing too great a time to elapse before advising that subject to Board ratification and referee checks, they are the preferred candidate. Where a Board has not been clear amongst its own members as to what is the agreed recruitment process, they are in danger of losing their best candidates. For example, assume there is a Selection Committee whose recommendation is to be ratified by the Board, but the Board members who weren’t on the Selection Committee say they want to choose between two or more candidates. When everything is put on hold while debate occurs and perhaps an additional meeting is called, candidates sometimes get edgy that all is “not right” and despite assurances to the contrary, withdraw their candidacy. What a disastrous outcome, and it may be worsened, if the Board has also handled the situation for the Acting CEO poorly. Reread the first part of the article – loss of a valuable staff member may also occur, not necessarily immediately, but there is a high probability.