Boards Have a Blind Spot in Hiring CEOs

How to avoid the costliest error a board can make.

The most critical role of a board of directors is hiring and firing the CEO.

If you’re on a board and you have a CEO transition on the horizon (maybe Coldplay is coming to town), I urge you to be aware of a CEO-hiring misstep I see boards make, or almost make, repeatedly.

First, I want to explain why this error happens: Most board members have never been in the CEO seat. They therefore do not have a first-person experience of what the CEO does. This doesn’t mean they cannot still be good board members, but it does mean they need to put in a little extra work to understand how to hire and fire the CEO properly.

Now, let’s say a board is faced with a situation where they need to hire a new CEO. Maybe it’s a software company where revenue has been flat for two years.

Three candidates for the new CEO emerge:

• Candidate A is a VP of Sales with a track reco…