The Director’s Dilemma – September 2021 Edition

September 01, 2021 Share this article:

Produced by Julie Garland-McLellan, Consultant at AltoPartners Australia and non-executive director and board consultant based in Sydney, Australia.

Contribution by Scott Eversman,Managing Director at Diversified Search Group / AltoPartners USA, where he leads the firm’s Energy practice

This edition of the newsletter was first published on The Director’s Dilemma website and the full newsletter is available for viewing here. To subscribe to future editions of the newsletter, click here

The Director’s Dilemma - September 2021

This month we consider how to recover from a recruitment activity that has gone astray.

Karen chairs a government-owned utility board. The CEO recently announced a long-expected decision to retire.

The board appointed a professional search consultant selected from the government’s list of approved service providers. They had a long list of skills and attributes that they wanted in their candidates.

As expected, finding candidates with the skills the board was seeking proved difficult. In addition, all the shortlisted candidates were currently employed and on salaries above pay brackets for this level of appointment within the government sector. None was highly enthusiastic about moving to the public sector at a lower salary.

To help candidates understand the non-monetary benefits of the role, Karen and her board arranged for the three preferred candidates to have coffee with the outgoing CEO and hear firsthand how rewarding the appointment will be.

Unfortunately, the CEO’s secretary misunderstood the process and asked the internal HR department to schedule the appointments. Now the three preferred (yet still hesitant) candidates have received a standard email, asking them to come for an interview, rather than a conversation, and asking for CVs, referee details, and other data.

The search consultant is furious, saying that the candidates are now upset because they feel their privacy has been breached when they had not yet said that they were willing to take the position. He has already invoiced 70% of the fee and now claims the process is thwarted.

What can Karen do to help her board recover from this disaster and, hopefully, recruit one of their preferred candidates?

Scott’s Answer

If the situation is to be salvaged, Karen must respond quickly. Communication with the Board and CEO as well as with the candidates must take place immediately when it becomes clear that a breach of trust has occurred.

Working with the search consultant, Karen needs to determine what the perceived and/or actual degree to which confidentiality was breeched? Acknowledging candidates’ frustrations, they must gain perspective, while representing the client with integrity.

Karen must then engage with each candidate and listen empathetically to their specific concerns. Anticipate some anger. More likely, candidates may see this as proof of a ‘typical’ government utility mindset, a culture of bureaucratic insensitivity if not arrogance. What will go some way to salvage the situation and establish Karen’s integrity with candidates (and by extension that of the board), is for her to ‘own’ the mistake and not devolve into a blame game. It may help to bring the head of the Nominations Committee or another board member with deep emotional intelligence into the conversation. This signals to candidates the importance attached to the succession process.

If candidates are willing, Karen should continue to facilitate the encounter with the CEO. However, this time, the CEO himself should communicate personally and directly with the candidates (preferably with a call). An authentic apology and taking ownership on behalf of the company for the mistake would be a good start. Then to schedule the ‘cup of coffee’ chat where he can shift the conversation back to the transcendent purpose of the utility for the community and possibly the nation.

The attributes that will serve Karen best to recover from this incident are speed, integrity, honesty, empathy, and openness, accompanied by a considerable dose of humility. Above all, repositioning with candidates the fact that there is a higher purpose to be pursued in this opportunity.

Julie’s Answer

This is the sort of disaster that happens when directors don’t fully engage with board level recruitment. The board needs to get its act together fast. They can’t abdicate to the CEO and search consultant. If the CEO’s retirement decision was expected her board should have been prepared.

First Karen needs to bring together a small group of directors to serve as a nominations committee or task force. They should go through the long list of requirements that the board has compiled and rank these into groups of essential, highly valued, and ‘nice to have’. The board need to understand what are the characteristics that the candidate must bring, and what are the skills that the candidate can develop with their support and leadership.

That will help the consultant find candidates who are not unwilling to take on the role.

Then Karen needs to have a frank conversation with the consultant, apologise for making him or her look bad in front of some high-profile candidates, and focus them on creating a list of realistic candidates who are keen to take the role and don’t need the outgoing CEO to ‘sell’ it to them.

A brief conversation with the current CEO to explain the disappointment the board feels at his poor delegation of such an important decision and to request that he, personally, reach out to each of the candidates and apologise for what happened.

The board should prepare for the eventual succession and develop a plan for supporting the eventual new CEO. They should review delegations and create stronger oversight for the early days of the new CEO’s tenure. Much of this, but not all, will fall to Karen, as the Chair.

Finally, the board needs to consider its own processes for CEO succession to ensure it is better placed next time. To lose one set of candidates is unfortunate, to lose two would appear to be careless.