5 Ways to Find and Hire Your Next CEO

Hiring a CEO is not for the inexperienced, or the feint-hearted. It requires knowledge, critical understanding and a well-laid plan to not only identify the skills and experience of your next company leader, but also to know how and where to start.

The CEO is likely to be one of the highest paid recruits and so it pays to be efficient and clear on your strategy, from outsourcing the search process through to asking the right questions at the interview stage. Not to mention, salary negotiations and ensuring a smooth onboarding.

In this post, we’ll explore the best ways to find and hire your next CEO. But before we take a dive into the CEO hiring best-practices, let’s look into what a CEO does exactly.

What is a CEO (Chief Executive Officer)?

The highest-ranking individual in a corporation or organisation is the CEO, which stands for Chief Executive Officer. The CEO is in charge of a company’s or organization’s overall success as well as making top-level management choices. They may seek advice on major matters, but they have the last say when it comes to making decisions. CEOs can also be referred to as chief executive, president, or managing director.

The Chief Executive Officer is directly responsible to and accountable to the Board of Directors for the company’s performance. The Board of Directors (BoD) is a group of people who have been elected to represent the company’s shareholders. The CEO is frequently a member of the board of directors, and in some cases, the chairwoman.

The Roles and Responsibilities of the CEO

The CEO is responsible for managing the formulation and execution of long-term strategy with the goal of generating shareholder value, in addition to the general performance of an organisation or firm.

The functions and responsibilities of a CEO differ from one company to the next, and are typically determined by the company’s organisational structure and/or size. In smaller businesses, the CEO takes on a more “hands-on” role, making lower-level business decisions, for example (e.g., hiring of staff). He or she usually solely handles with high-level business strategy and important company decisions in larger companies. Managers or departments are in charge of other responsibilities.

The typical duties, responsibilities, and job description of a CEO include:

1. Communicating, on behalf of the company, with shareholders, government entities, and the public
2. Leading the development of the company’s short- and long-term strategy
3. Creating and implementing the company or organization’s vision and mission
4. Evaluating the work of other executive leaders within the company, including directors, vice presidents, and presidents
5. Maintaining awareness of the competitive market landscape, expansion opportunities, industry developments, etc.
6. Ensuring that the company maintains high social responsibility wherever it does business
7. Assessing risks to the company and ensuring they are monitored and minimized
8. Setting strategic goals and making sure they are measurable and describable

Start by Visualising the Perfect CEO for your Business

Appointing a new CEO is an exciting time for any business, it usually indicates that you are in a financially stable position as a business, it also also presents an opportunity to look back at what has worked and hasn’t worked so well in the past.

You should already be clear in your mind about what qualities and experience your next CEO will bring to the business. Ask yourself, “what did I learn about the past CEO’s tenure?” Are there any areas you’d like to improve on? Is the goal to take the company in a new direction – or is the focus on building upon current financial performance?

For many businesses, stability is as good as anything, so your plans for the next CEO may not be ambitious – that’s not necessarily a negative. If a change in direction, seeking new markets or addressing company culture is of importance to you, then it would be wise to highlight these skills and qualities at the top of your ‘must-haves’ when profiling what your next CEO looks like.

Whilst profiling your next CEO isn’t an exact science, you should be clear about what you plan to achieve in the next 12 – 24 months. Be that a cultural change, financial improvement or a complete change of tact. Knowing this will make it easier when briefing external executive search companies or screening potential candidates ahead of interview selection.

Here are some good questions to ask yourself when visualising what your next CEO should look like:

– Is significant company change or a shift in direction afoot? Should my next CEO evidence experience of handling this?
– Does my next CEO need to have previously worked in the sector – or will a CEO from a different sector provide new insights and ideas?
– Do I have a gender preference for the role?
– What skills and experience does my current CEO think we need in order to achieve our future goals?
– What has been lacking in leadership and direction from our past company leaders?

Is your Next CEO Already Working for You?

Just because you are hiring for the most senior position in your company, never write off the fact that your next CEO may already be working for you.

This can prove to be the least expensive and disruptive approach to take when appointing your next CEO.

Chief Operating Officers and Chief Financial Officers commonly go on to take the mantel of CEO, due to their time served and having a thorough operational and financial understanding of the business.

Managing Directors and Senior Directors are usually the next most viable candidates. So be sure to look inward at the talent, skills and experience available to you before deciding if an external hire is absolutely the right decision for your business.

Appointing a CEO Externally

If it has been decided that a CEO should come from outside of the current business, then there are a number of possible routes to finding and hiring your next company leader.

Movers and Shakers in Your Sector

Having worked in your sector for some time, you will likely be familiar with CEO’s and Senior Executives from other and competing companies, all of whom may look like ideal candidates to take up the mantel. By approaching these potential candidates directly, you stand the chance of landing a confidential discussion about the role available. Reaching out via LinkedIn or otherwise, this might actually be the most cost-effective route to hiring your next CEO. The downside being, you will feel somewhat exposed if the individual is not interested or isn’t prepared to cut ties with one of your existing competitors.

But nothing ventured, nothing gained as they say. So it’s always worth consulting your little black book before considering more expensive options when landing your next hire.

Appointing an Executive Recruiter

Saving the embarrassment of reaching out to a competitor, or deciding the task of searching and hiring a CEO is too time consuming, it is very common for companies to appoint a third-party when recruiting their next senior hire. This is where Executive Recruiters come in.

What is an Executive Recruiter?

An executive search company (informally known as headhunting, or a headhunter) is a type of professional service organisation or individual that specialises in recruiting senior executives and other specialist professionals (Data Compliance Officers, SEO Technicians, Engineers) for their client companies in various industries. Executive search agents/professionals typically have a wide range of personal contacts in their industry or field of specialty; detailed, specific knowledge of the area; and typically operate at the most senior level of executive positions.

Executive search professionals are also involved throughout the hiring process, conducting detailed interviews and presenting candidates to clients selectively, when they feel the candidate meets all stated requirements and would fit into the culture of the hiring company. Executive search firms typically have long-lasting relationships with clients spanning many years, and in such cases the suitability of candidates is paramount. It is also important that such firms operate with a high level of professionalism and confidentiality.

When corporate entities elect to use an outside executive search company, it is usually because they lack the internal research resources, professional networks, or evaluative skills to properly recruit for themselves. Using an outside executive search company also allows the corporate entity the freedom of recruiting from competitors without doing so directly, and the ability to choose among candidates that would not be available through internal or passive sourcing methodologies. Executive search companies tend to operate both nationally and internationally. Many specialise in a particular business industry sector. The contractual relationship between the client and the executive search company falls into two broad categories: contingent and retained. Contingent recruiters are paid only upon the successful completion of the “search assignment.” Retained recruiters are paid for the process, typically earning a recruiting fee in three stages based on the anticipated compensation of the executive.

For all of the reasons outlined above, it can certainly pay to appoint an Executive Recruiter to take on the task of hiring your next CEO. However, this service usually comes at a sizeable cost – Executive Recruiters typically charge a percentage of the CEO’s first annual salary.

Looking to speak with an Executive Recruiter? Check our Executive Recruiter Directory

Using Executive Job Boards

Before you appoint an Executive Recruiter, you may at first wonder if you can take the recruitment process on in-house. Many companies do this – as it’s relatively cost-effective and only requires your time to post a job and then screen candidates ahead of the interview process.

Using job boards such as CEO Jobs, you can simply post a job advertisement and await candidate CVs to land in your inbox. Unlike using an Executive Recruiter, you will then be responsible for the entire screen process, arranging interviews and conducting salary negotiations before finally offering your next CEO the job. Some companies find this all too time consuming and so rightly so, leave it to the professionals.

Hiring a CEO?Post a Job

If you do decide to recruit directly, here are some additional links to help you in your search and interview process:

CEO Job Description + Examples

Great Interview Questions

Tips for Hiring C-level Executives