How Do You Find a New CEO?

You must choose, but choose wisely.

Boards face several challenges in the task of hiring a new CEO:

• There is very little objective data on how to hire a great CEO.

• Few people have hired more than a handful of CEOs during their careers, limiting their experience. (Large private equity firms are an exception.)

• Few agree on what the CEO’s responsibilities are and what they want him or her to accomplish.

Obviously, the board wants the CEO to increase shareholder value, but that is as helpful as telling a football coach you want him to win.

Every board would love to hire a CEO who has run a similar-sized company in the same industry and delivered exceptional returns. But even if the board can find this ideal CEO, he or she is unlikely to want to do the same thing again. People who want to keep moving up in their careers will look for a new challenge and a bigger opportunity. Therefore, a board will usually have to compromise on their ideal candidate and hire someone who doesn’t check all the boxes.

Here’s how to select the right criteria and weigh the candidate’s qualifications for a successful hire: