Board Hiring Decisions

Leadership

Board Hiring Decisions

I have great admiration for the Boards of Directors we work with at Koya Leadership Partners. Almost without exception, members of Boards of Directors are incredibly capable, committed, and extremely busy individuals who have come to us to successfully execute on their most important responsibility: Selecting a new leader for their organization.

Our executive search process is designed to give board members the information and tools they need to ask the right questions and ultimately, make the right hiring decision. Unfortunately, as a recent Wall Street Journal article shows, without this kind of strategic planning and framework, board hiring decisions often go awry.

Though the article is referring to corporate hiring processes, the challenges and potential missteps just as relevant for the nonprofit sector.

Here’s an excerpt from the article:

Research has shown that as many as 35% of CEO departures are forced exits. In a recent survey of roughly 180 chief human-resources officers, more than half said they had observed at least one failed C-suite appointment over the past five years, and some estimated that as many as 40% of all C-suite-level hires

Consider the financial impact of those failures. We often see payouts in the $60 million to $100 million range to release a failed CEO. In addition, our research has found that direct costs (salary, benefits, bonus, severance, etc.) can reach $20 million when a new C-suite executive plunges to earth. If indirect costs are included (missed business opportunities, suboptimal operations, etc.), the impact of a CEO stumble can cost a firm more than 30% of its stock price, while other C-suite mistakes can shave as much as 1% off share value.

Boards and business leaders know the risks. But again and again, C-suite candidates are chosen despite shortcomings the group itself has identified, candidates with better qualifications and even a board’s own vocalized misgivings.

Click here to read the entire story, which includes some excellent general guidelines to ensure effective decision-making: WSJ -Why Boards Go Awry in Their Hiring Decisions.

 

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Molly Brennan
Managing Partner

Molly oversees Koya’s executive search services function, working closely with Koya staff and clients to ensure successful placement of top talent and emerging leaders at nonprofits across the globe.

Molly’s background is in the work-life and employee effectiveness field. Prior to joining Koya, she was Senior Editor for LifeWorks, a division of the Ceridian Corporation, where she developed educational materials and strategic communications designed to improve employee engagement and increase retention.

Molly previously worked as a journalist and holds a Master in Writing and Publishing degree from Emerson College, as well as a Bachelor of Arts in History from University of Vermont. She is grateful every day for the opportunity to work with people who are committed to making our world a better place.

Molly is Certified Diversity Recruiter.

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