The Role Of The Outgoing CEO In The Search Process

By Richard M. King

The announcement of the retirement of a nonprofit chief executive officer generally signals the beginning of a state of anxiety in the organization. The apprehension and foreboding that follows is a natural response and it illustrates the fact that leadership transition is never easy, even for organizations that have strong boards and loyal staff. Especially in the case of a long-tenured CEO, the dynamics of change at this level often lead the board to lean heavily on their outgoing executive to get them through the process of selecting a new leader as quickly and as painlessly as possible.

In concept, that seems like a reasonable approach. After all, the outgoing executive has led the vision and direction of the organization, has the most in-depth organizational knowledge about the enterprise, has maintained the community and stakeholder relationships, has the funding and budget details and has worked closely with the board of directors in all of this. However, in practice, asking the outgoing CEO to take primary responsibility for finding his or her successor is fraught with all kinds of potential problems and it often results in the next executive failing.

Informed boards of directors realize that the selection of the chief executive officer is one of the most important responsibilities of effective governance, one that cannot be delegated or relegated to others. They also know that their outgoing CEO can participate in important ways and at some point in the transition process without usurping this singular accountability of the board. The question is, what CEO activities are appropriate and reasonable during the process without being unintentionally disruptive or counter-productive to the work of the board?

This question can best be answered through the collective experiences of the thousands of nonprofits across the country whose boards have faced leadership transitions. Kittleman has managed such nonprofit CEO transitions since 1963 and in so doing we have observed a variety of scenarios in which the outgoing CEO has participated in the search process. Drawing on these experiences, we have compiled a list of Dos and Don’ts for the CEO’s involvement in hopes that these transitions can be a easy and painless as possible.

Dos

1) The CEO can support the search committee by providing contextual data and information on the organization in a take-stock approach prior to the board launching a search. Often this is accomplished by the CEO and staff compiling trend data and results over the term of the CEO in a retrospective that informs the committee of where they have been as an organization and where they may be in the future. While much of this information may not be new to the board, the intention is to frame it around the impending leadership transition.

2) The CEO can provide the search committee with a list of individuals whom he or she believes would be good sources or leads to qualified candidates for the position. This might include other local professionals in the field, colleagues from state or national associations, thought leaders in the industry served and others who would have their own networks of contacts in related fields of service. But, the CEO should stop short of nominating certain people to the committee as preferred candidates.

3) Due to the uncertainty during the transition, the CEO should pay close attention to the employee group dynamics and, in particular, stay in close communication with senior-level management staff. The period of time leading up to the board’s selection of a new leader is often accompanied by behavior changes associated with leadership transition anxiety. The CEO can help stabilize the situation if he or she is attentive to such behavior and thereby prevent board members from being drawn into any drama at the staff level during the transition.

4) The CEO can play an extremely valuable recruiting role by meeting privately with the final candidate at the very end of the search committee’s process. This is best accomplished sometime before the finalist goes to the board for ratification. The timing of this meeting is crucial to a successful conclusion and it often provides the outgoing and incoming CEOs with an opportunity to establish the kind of relationship that will be most productive and helpful after the transition takes place.

5) In the right situations, the outgoing CEO can provide an invaluable service to the new CEO by introducing him or her to a variety of community stakeholders such as donors, elected officials, civic leaders, other nonprofit colleagues in the community, etc. However, as well meaning as he or she may be, the outgoing CEO should not offer to make such introductions. It should be understood that it is in the sole discretion of the new CEO to ask the outgoing CEO to get involved in this way. The board can support this policy by making sure the outgoing executive understands it long before the new CEO is selected.

If you follow these suggestions you will be using the outgoing CEO appropriately and avoid any serious transition issues. But, even then, you will still face difficulties if you do not consider the Don’ts. Here are some of the more important ones.

Don'ts

As you step into the leadership selection process, don’t ask or allow the outgoing CEO

... to become a member of the search committee. It may seem like a nice gesture and a fairly practical move what with all the knowledge he or she would continue to bring to the table. But this has proven to be problematic, particularly with candidates who, when interviewing, will feel uneasy talking openly in front of the board with the outgoing exec sitting in the room.

... to write the job description, qualifications or candidate credentials for the new CEO. The leadership requirements must evolve from the board’s commitment to its vision and mission and then match their selection of a new leader with the organizational goals that have been adopted. The committee should craft the job requirements only after it understands what the organization will need in leadership for the future.

... to receive, review or assess candidate resumes for the search committee. This is a variation on #2 above and is intended to keep the focus of the selection process at the committee and board level. It is not uncommon for the search committee to get the outgoing CEO’s perspective on the finalist or finalists at the end of the process, but any input at a point earlier in time would be unwise.

In addition to the above, and after the board has selected the new CEO, there are additional don’ts that should be considered. Don’t ask or allow the outgoing CEO

... to become a member of the governing board. This principle should extend to any advisory boards or affiliated organizations that would put the outgoing executive in possible compromising situations with the new CEO.

... to work on any consulting or part-time projects for the organization after the new CEO has begun. There are rare exceptions to this principle. An outgoing CEO was asked by the board to write a history of the organization after she left and this was accomplished without any problems for the new CEO. Avoiding any potential conflicts between the new and outgoing CEO is achieved when there is no overlap in their presence within the organization.

... to talk with employees who come to the outgoing CEO to talk about the new CEO. The pitfalls in this are too obvious to even mention. When it happens it can be disastrous for the organization. The outgoing CEO must be in absolute agreement with this principle and act responsibly from the first moment this situation may arise.

The outgoing CEO can provide an important service to the search committee during leadership transition but those activities must be focused on the best interests of the organization as it looks to its future. Every situation is different, so it is only through an open dialogue on this issue between the Board and CEO that those best interests can be accomplished.