CEO Transitions: Getting off on the Right Foot
November 7 2011 by Dr. Thomas J. Saporito
The retention of CEOs is enhanced when they begin their tenure on a strong footing. While executive integration is not a new topic, a recent study by RHR International shows that the process unfolds in a very specific fashion. Corporate board members generally have a favorable view of how well the CEO integrations they have been involved with have gone.
CEOs do not necessarily agree with that assessment. Therefore, boards should be proactive and deliberate in meeting with the new CEO. They should not wait for the CEO to come to them. In a group and individually, board members should initiate contact and be intentional in their approach. An open-door policy is not enough. According to the study, board clarity, alignment and mutual understanding of how the CEO’s performance will be evaluated are aspects of the process highly valued by incoming CEOs.
Arranging frequent interactions between the new CEO and board members—in which they share thinking about strategy, as well as their own personal experiences in the CEO role—will help the new CEO avoid many of the common pitfalls experienced during the transition and during his or her tenure.
The most important issue here is having alignment between the new CEO and the board on the strategic imperatives going forward. The new CEO also needs to assess the cultural and structural adjustments that are required to meet the demands of the strategy.