In The Hero’s Farewell, author Jeffrey Sonnenfeld outlines four distinct typologies among retiring CEOs: the monarch who must be forcibly removed; the general who leaves reluctantly and plots a return; the ambassador who leaves gracefully yet still lends support; and the governor who willingly departs and moves on to other pursuits.
Fortunately, notes Paul Bohne, Witt/Kieffer Senior Vice President, CEO transitions today mostly feature ambassadors and governors. Yet no matter how gracious and stoic a CEO may appear, “retirement is a time of turmoil,” Bohne writes in the most recent issue of The Corporate Board. “It involves relinquishing a great deal of power and status and redefining one’s self-perception. This is a process many CEOs will find difficult or stressful, and thus they may postpone or resist it.”
In “Boards and CEOs as Partners in Transition,” Bohne cites Sonnenfeld in noting that a CEO’s personality and even leadership style can change as retirement nears. The board has a responsibility to understand this, Bohne emphasizes. It must work together with the CEO to ensure that this most difficult transition is handled tactfully and successfully.
Bohne explores various rules of thumb that boards and CEOs can follow to ensure that they become partners in transition:
- Appreciate the complexities of what the CEO is going through.
- Understand that his or her agenda and leadership style may change as retirement nears.
- Ensure that the board drives the CEO transition process.
- Work together to establish parameters for the transition.
- Embrace the opportunity for change.
- Value the retiring CEO’s role as trusted advisor and identify what role the CEO should and should not have in a selection process for a successor.
- Work to minimize the overlap between CEOs.
“A CEO’s retirement is not business as usual,” Bohne writes. “It’s a time for the board to step up while the incumbent, gracefully, steps away.”
By Paul Thomas, Witt/Kieffer Senior Writer (@PaulWThomas)