There’s an old prayer that asks for the “serenity to accept the things we cannot change, the courage to change the things we can, and the wisdom to know the difference.”
A CEO’s departure from an organization may need to be accepted with serenity, but how a board of directors chooses a new CEO also takes courage, wisdom, and additional skills.
Many charities and not-for-profit organizations have high-functioning boards whose members are used to doing executive recruitment and can bring a certain rigour and skill to the task of replacing an outgoing Chief Executive Officer or Executive Director.
But not all boards have such skills. And even skilled board members sometimes struggle with avoiding critical nonprofit CEO search mistakes.
Finding the next CEO is one of the most strategic things a board will ever do. However, making a wrong hire or just an okay hire can be very costly for the organization regarding time, financial investment, organizational reputation, and internal relationship damage.
No one chooses the wrong CEO or ED on purpose. There are some common errors that boards need to avoid when they are searching for and recruiting a new CEO or Executive Director.
The nonprofit or charity board doesn’t have a succession plan or risk management plan in place.
Like death and taxes, the departure of a leader is inevitable. But, unfortunately, it’s also more common than it used to be. It’s not unusual for a CEO to remain in the role for less than five years. That’s why boards of charitable or nonprofit organizations need to include succession planning and risk management as annually recurring discussions. Sometimes a CEO will give advance notice about leaving or retirement, but sometimes it happens unexpectedly and quickly. So the board should already be asking themselves questions, including whether there is anyone in the organization who could be put in place, even temporarily, as the interim CEO and who could take over the top donor relationships in the event of the CEO’s departure.
The nonprofit or charity board doesn’t have a CEO hiring plan established.
When starting your search for a new CEO, many boards realize they have not documented the necessary, predetermined steps. Even the best board members are often not connected to the organization’s day-to-day operations. But as soon as the transition is announced, do they know what questions to ask? Do they know who to talk with on staff about the next steps? Do they know what other stakeholders they should speak with, from donors to vendors to experts in the charity’s field? Without an advanced plan, there can often be a rush to replace the CEO. You don’t want to miss out on the opportunity to clarify the most critical future needs of the organization and then update the role of the CEO before the hiring process begins. It’s also a moment when staff can be the most candid about what is and isn’t working well.
The nonprofit or charity board fails to count all of the costs of an empty CEO seat during the search and recruitment process.
It can take a while to fill the CEO role—sometimes as long as four to six months. So an important question is: What direction and activity aren’t happening that need to occur during such a significant transition? Often the CEO does tasks that no one else does, and most not-for-profit CEOs wear five or six different hats. If the CEO position goes empty for some months, essential functions such as reporting to the board, managing the staff, overseeing the finances, and ensuring good donor relations may not be effectively handled. The CEO’s departure may also result in the loss of other essential employees, particularly those who aspire to the CEO role but are not considered candidates. These require much time from the board members, who may suddenly have additional tasks without a CEO.
The nonprofit or charity board doesn’t consider an external interim CEO.
The corporate sector makes regular use of interim leaders at the CEO and other levels. Experienced leadership consultants who run charities can be valuable as interim CEOs to ensure a smooth transition. Their services can include fundraising, staff management, and preparing the organization to be handed off to a permanent CEO.
The nonprofit or charity board doesn’t know the best places to promote the role.
Many organizations don’t have full-time human resources departments, so properly promoting a CEO job opening can be challenging. Boards can make the mistake of simply recruiting from their limited networks or assume that leadership skills can be easily transferrable between sectors. As a result, they may unnecessarily spend too much money and time placing the job opportunity in places where the best candidates won’t see it. They may also miss out on exploring a more diverse base of candidates. They may not know the marketplace well and may rely on the passive job ad strategy. They may also underestimate the time it takes to hire and be surprised by the limited pool of qualified leaders applying for the role. For the majority of charities and nonprofits, it is a competitive talent market.
The nonprofit or charity board is underqualified for the candidate vetting process.
Many astute board members ask good general interview questions, but many do not know enough about the marketplace to ask the right questions and to assess a candidate’s answers. Also, many board members are not adequately qualified to answer the role-specific questions a candidate asks in the interview.
The nonprofit or charity board chooses the search firm their own company uses.
Even if you decide to hire an executive search firm, it’s essential to choose one that knows the charitable and social purpose sector marketplace. There are many good executive search firms in Canada to search for corporate executive roles. But most of these firms don’t have the experience and network of charitable leadership candidates who can successfully step into the leadership vacancy of a charitable organization.
Many boards don’t accurately consider all the costs of hiring a new charity CEO on their own. So if you prefer to use a professional search firm that focuses on the charitable marketplace, we’d love to discuss how we can help you. We will help ensure that you avoid the errors that all too frequently lead to faulty executive hires in the charitable sector.