The role of the Chief Executive Officer is unlike any other role within the Company structure. In addition to performing the crucial role of propelling the Company towards profitability and ensuring outperformance of competitors, whoever occupies the position becomes to a large extent the face of the company. The CEO’s actions and inaction will significantly impact on not just the Company but its stakeholders. Hiring the CEO is a major responsibility of the Board and given the potential impact of a wrong hire, it behoves on the Board to take the trouble to seek out a great CEO.
What criteria should then guide the Board in making this all-important decision? Professional or academic qualification and track record of achievement whilst useful in shortlisting candidates for consideration are not critical in selecting the best fit for the CEO role. As economies embrace innovation and as markets continue to evolve and adapt to global changes, such predictive bias can no longer be sustainable. In selecting the CEO, the Board should carefully assess prospective candidates within the context of the attributes needed to thrive in an increasingly competitive market.
Whilst it is difficult to set out definite and cast-in-concrete attributes for the CEO candidate as sufficient flexibility and adaptability are critical, the following are useful criteria for the Board to consider:
Integrity: The candidate should have a track record of integrity and strength of character. There should be a fit with the Company’s core values and culture. Where the intention is to achieve organisational transformation that encompasses a culture change, an alignment of the CEO’s values with the culture the Board seeks to enthrone will be a key criterion.
Innovation /Out of the box thinker: The constant evolution of economies and markets demand that companies seeking to remain relevant must adapt their business to these changes. An excellent example is Richard Thoman, one-time CEO at IBM and later Xerox. At a time when the focus of competition was increased sales, mergers and acquisitions, Thoman’s strategy was as described by Harvard Business Review to leverage on “…something so intangible it does not even show up on the Balance Sheet.” He aggressively pursued a strategy focused on licensing the intellectual property of Xerox. This strategy saw increased revenue inflow of over a billion dollars from licensing its IP alone.
Strategic thinker & effective communicator: Devoid of ambiguity, the CEO has to be able to set clear direction for others to follow. The ability to communicate effectively – including great listening skills – is a must-have. The CEO’s ability to motivate and retain top talent will be garnered from his/her track record.
Self-confidence: A leader that will be truly comfortable in his/her skin. Have clearly defined personal values, is confident about these and believes in themselves sufficiently to inspire others. Such a leader has no qualms about making mistakes and owning up to them rather than looking for who to blame. A self-confident leader realises that there will be brighter, quicker and more articulate people on their team and are happy to push them forward.
Genuine humility: Is the CEO approachable and relatable? Able to balance self-confidence and humility? Is not arrogant nor has a chip on his/her shoulder? Does the leader recognise that everyone on the team is important? Leadership comes with owning up to mistakes and giving others credit when they have earned it.
Courage to deal with crisis: Crisis is inevitable, and a great CEO will be proactive rather than reactive. The COVID-19 pandemic may be the most significant all-time test of leadership the world has ever witnessed. Every leader on the planet is facing the same potential threat. Every leader is reacting differently, in his or her own style. And every leader will be judged by the results. German Chancellor Angela Merkel embraces science. Brazilian President Jair Bolsonaro rejects it. U.S. President Donald Trump hosts daily briefings, while Indian Prime Minister Narendra Modi holds no regular briefings at all, even as he locks down 1.3 billion people.
Jacinda Ardern, the 39-year-old prime minister of New Zealand, is forging a path of her own. Her leadership style is one of empathy in a crisis that tempts people to fend for themselves. Her messages are clear, consistent, and somehow simultaneously sobering and soothing. And her approach isn’t just resonating with her people on an emotional level. It is also working remarkably well. (the Atlantic). A clear articulation of the organisational values makes it easier to deal with crisis when they occur.
The aforementioned attributes are by any means exhaustive and should be adapted to suit the Company’s needs.
The performance of the Company is intricately linked to the CEO’s performance and inevitably, the CEO’s performance (or a lack thereof) is measured against the Company’s performance. Thus, when CEOs stumble or fall, they pull their companies down with them. Having appointed the right CEO, the Board should clearly define key performance indicators (not only financial performance), approval limits and reporting expectations amongst others. Assuring CEO autonomy should not be an excuse to limit performance appraisal to the Company’s financial performance.
BISI ADEYEMI
Bisi Adeyemi is the Managing Director, DCSL Corporate Services Limited. Kindly forward comments and reactions to [email protected]
