Are You Rolling the Dice on CEO Succession?

About the Authors:
Deborah J. Cornwall is Managing Director and Wilmot J. Gravenslund is Director of The Corlund Group LLC, a Boston-based consulting firm focused on assisting organizations with executive leadership assessment and development, governance effectiveness and change management.

Overview:
While most health care organization governing boards are familiar with their responsibility for CEO succession planning, few may be looking at the process from the perspective of risk management. However, as this publication suggests, because the CEO has such an impact on the organization’s ability to manage risk and achieve success, boards must ensure that they, too, minimize the risk of hiring a CEO who is not the best fit for their organization today and into the future.

Are You Rolling the Dice on CEO Succession? by Deborah J. Cornwall and Wilmot J. Gravenslund of The Corlund Group, discusses how boards can effectively engage in a CEO succession process that results in a win-win outcome for both the organization and the new chief executive. The publication outlines the risks that most health care organizations face and the impact that the CEO can have on limiting risk exposure. It also discusses issues of CEO turnover and succession processes in organizations both in and outside of health care. The authors describe a Leadership Continuity Risk Management Model that can help boards understand how to:

• effectively define the requirements for a new CEO in terms of behaviors that will be necessary for future success;
• best assess the capabilities of CEO candidates and their likelihood of success on the job; and
• approach the final selection decision taking into account the degree of change that will be best for the organization and what support the new CEO will need from the organization and the board to succeed.

They also discuss nine typical succession pitfalls boards should avoid and how boards can effectively manage the risks that are always a part of any change.

This publication can be used by boards in a variety of ways. New board members will benefit from using this publication as an orientation resource to gain a clear understanding of the board’s role and responsibilities in CEO succession planning and selection. The full board can benefit from discussing the ideas presented here as part of a board meeting educational session or board retreat. Board members participating in CEO selection will find this publication a valuable resource throughout the process. Board chairs and other board leaders will gain better insight into what makes board/CEO relationships effective from both the CEO’s and board’s perspectives.

Because the board/CEO partnership is so critical to organizational effectiveness, the authors conclude that, “regardless of whether a board goes inside or outside for the next CEO, it had better get the selection decision right.” That said, they provide boards with a resource here that gives them every chance for success.

For more information or to order, contact the Center at 888-540-6111 or email at info@americangovernance.com