The Board’s Role in CEO Transition—Part 1

Guest post by Karen Otto

When a health care CEO leaves—whether the departure is expected or unplanned—the board needs to be in control. A transition in leadership can be a turbulent time. Organizations can avoid the turmoil by putting a transition plan in place proactively.

Start here and now

Identify a transition team. Which board members—the executive committee or the whole board—will be responsible for the transition process?

Revisit your leadership profile

Organizations grow and change, and the transition team should review ideal leadership qualifications every few years. Seek the input of critical stakeholders as part of the process. With a defined CEO profile in place, the board is less likely to be caught off guard by an unanticipated leadership departure, and the transition to a new CEO will advance more easily if stakeholders have had a voice.

Build a succession pipeline

While it is the CEO’s responsibility to develop the hospital’s or system’s future leaders, the board needs to take the reins in evaluating candidates—internal as well as external. Failure to address a leadership transition plan leaves a board ill-equipped to fulfill its governance obligations and can result in undue influence on the process by the outgoing CEO.

Manage the separation

The board’s primary responsibility is the current and future health of the organization. Ensuring a smooth separation is an important contributing goal. Once the board is made aware of the CEO’s intended departure (ideally, two or more years in advance), it should act quickly to communicate expectations for the transition.

Provide an outline of the process and the incumbent’s role in meeting priorities until his or her departure, including a defined timeframe for providing the new leader with background on the organization’s operations, finances, strategy, etc. This makes it clear that it is the board and not the CEO that is in charge of the process.

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