The recruitment process involves four key phases: preparation; attracting and assessing candidates; decision making and negotiation; and communication and transition.1
The different activities are shared among different bodies: the whole Board; the recruitment sub-committee; the executive search consultant (or those performing these duties); the selection panel; and the Board Chair. The Chair should also be a member of the recruitment sub-committee and selection panel.
This chapter highlights the sequence of activities to be undertaken as part of the CEO recruitment process and who should undertake them. The remainder of the publication provides further commentary about the most important aspects of the process.
Preparation
Establish a recruitment sub-committee
The whole Board establishes a recruitment sub-committee with responsibility for making key decisions about the recruitment process and keeping the process on track.
The whole Board establishes clear terms of reference which specify the authority given to the sub-committee, the decisions they are able to make, and when and how they need to consult with the full Board.
Establish the brief
The whole Board meets to develop and agree upon a succinct statement about:
- the organisation, its operating environment and future directions
- key accountabilities of the CEO role (based upon analysis of the operating environment and future directions)
- key selection criteria (KSC) for recruitment (based upon analysis of the operating environment and future directions)
- statements about ‘fit’
- what the organisation is able to offer the successful candidate
- other relevant information.
(See also Developing the brief and Appendix C CEO recruitment brief template.)
Check legislation
The recruitment sub-committee reviews the enabling legislation and modifies the processes outlined in this chapter to accommodate any particular requirements contained within the legislation.
The legislation may, for instance, specify a role for the portfolio department or its Secretary in the recruitment process. The committee should consult with key contacts within the relevant Victorian Public Service (VPS) department about when and how they could be involved with the process.
Develop a project plan and contingencies
The recruitment sub-committee establishes a timetable for key steps and who will be involved in each of them.
The committee also establishes contingencies in case it takes longer than anticipated to appoint a CEO, for example, a suitable candidate cannot be found or the candidate has to fulfil obligations to their current employer before being able to take up the new role. The contingency plan should identify how the CEO tasks will be undertaken until a permanent appointment can be made (typically by having a senior staff member act in the role, extending the contract for the current CEO, and/or putting new initiatives on hold).
Establish employment terms and conditions
The recruitment sub-committee establishes clear terms and conditions for the appointment in line with the Government Sector Executive Remuneration Panel (GSERP) guidelines or VPS executive remuneration rates (as appropriate).2
The sub-committee, with GSERP advice, determines remuneration parameters for negotiation; that is, what can and cannot be offered as part of the employment package.
Engage an executive search consultant (optional)
It is not mandatory to engage an executive search consultant. However, there are significant benefits in terms of time saved, increased capacity for a wider search for candidates, and more rigorous and impartial candidate evaluation. The recruitment sub-committee undertakes the work to engage an executive search consultant. (See also Chapter 3, ‘Using an executive search consultant’.)
Where the decision has been made not to use an executive search consultant, the recruitment sub-committee needs to determine who will undertake the tasks ascribed to the executive search consultant in this chapter. Typically the tasks may be shared among members of the sub-committee, the Board Secretary and other employees of the organisation (as appropriate). Chapter 3 may also be helpful in thinking about these tasks and who should undertake them.
Set up the selection panel
The recruitment sub-committee identifies and approaches appropriately capable people to form the selection panel. The recruitment sub-committee should also task someone to undertake arrangements for meetings of the selection panel for conducting interviews, including blocking time in diaries as soon as possible.
Approve the preparations
The recruitment sub-committee briefs the whole Board about the preparations.
The whole Board approves the work and decisions taken by the Recruitment sub-committee to date. It endorses commencement of the next phase based upon this preparatory work.
Attracting and Assessing Candidates
Create a position description and promotional material
The recruitment sub-committee (or executive search consultant if being used) prepares documentation informing potential candidates about the role including a position description and promotional material. This is based upon the brief established by the Board and employment terms and conditions prepared by the recruitment sub-committee in the preparatory stages.
Attract candidates
The recruitment sub-committee (or executive search consultant if being used), the Chair and individual Board Directors encourage candidates to express interest in applying for the role through:
- direct contact (directly inviting people to apply)
- indirect contact (for example, messages sent through various networks) and advertising.
Collect evidence
The recruitment sub-committee (or executive search consultant if being used), working in collaboration with the selection panel, collects, validates and interprets evidence about each candidate’s abilities. The evidence typically includes, but is not limited to:
- written documents provided by the candidate, authored by the candidate, written about the candidate
- interviews with the candidates
- interviews with referees.
(See also Considering candidates).
Create a short-list
The selection panel determines which candidates meet the key selection criteria best; in other words, identify which candidates who could ‘on paper’ perform the role.
Review short-list
The whole Board reviews the short-list and the rationale leading to its creation. It approves commencement of the activities that follow.
Communicate with candidates not short-listed
The recruitment sub-committee (or executive search consultant if being used) advises the candidates who do not meet the key selection criteria (that is, those who are not short-listed) that they are unlikely to be considered further in this recruitment process and explains the reasons for this decision.
Assess fit (second interviews)
The selection panel conducts second interviews with short-listed candidates (those who meet the key selection criteria best) and referees. The purpose is to investigate the extent to which short- listed candidates will ‘fit’ with the organisation, the Board and the work ahead.
Final checks
The selection panel or Board secretary ensures that due diligence has been undertaken. In particular, checks need to be undertake to validate candidate claims about qualifications, awards, and eligibility for employment. (See also Chapter 5, ‘Before making the decision’.)
Decision Making and Negotiation
Rank candidates
The selection panel draws upon the second interviews to determine which short-listed candidates will and will not ‘fit’. They rank the candidates on the basis of best fit with current and future needs as described in the original brief and subsequent documents describing and promoting the CEO role.
Approve the candidate ranking
The whole Board reviews the ranking of the short-listed candidates and the rationale for this short-listing. If satisfied with the rationale for the ranking, it approves offering employment to the preferred candidate. It is good practice to have the preferred candidate meet the whole Board prior to an offer of employment being made. This provides a final opportunity to identify and address any potential problems regarding fit.
Make an offer and negotiate
The Chair makes an offer of employment to the preferred candidate, negotiates terms and conditions of employment and ensures that GSERP approval has been obtained.3
The candidate will accept or reject the offer.
If the candidate does not accept the final offer, the Chair consults with the whole Board to obtain approval to make an offer and commence negotiations with the second preferred candidate (and so on).
If none of the preferred candidates accept the offer, the contingencies established by the recruitment sub-committee in the preparatory stage are put into place.
The whole Board reviews the reasons for the failure to appoint and determines ways in which the aspects of the process should be modified to address identified problems.
Document the recruitment process and decisions
The recruitment sub-committee or Board secretary ensures that the documents created as part of the process are collected and stored in line with requirements for dealing with public records. (See Appendix C, ‘Documentation’.)
CEO Transition
Communicate the decision
The Chair provides feedback to the successful candidate. This feedback should include an explanation about what made them the preferred candidate (that is, their strengths) and any areas of weakness that became evident through the recruitment assessment activities and will need to be addressed through development activities once in the role.
The Chair also provides feedback to the unsuccessful short-listed candidates. This gives something back to candidates who have invested time and effort into the process. Feedback should include an explanation about where they came in the final ranking, reasons for this ranking and how they might strengthen their candidacy for similar roles in the future.
The Chair announces the appointment decision to the organisation’s staff and key stakeholders.
Assist with the change of CEO
The whole Board farewells the outgoing CEO. This will ensure that the outgoing CEO is inclined to continue contributing to the success of the organisation – by promoting its interests, helping the new CEO get up to speed and so on – even after they have left.
The Chair helps the new CEO transition into their new role, including having them meet the whole Board, either as a group or individually. (See also Setting the CEO up for success).
Footnotes
- See also Best practice recruitment and selection toolkit (State Government of Victoria, 2008).
- See executive and remuneration guidelines and resources.
- See executive and remuneration guidelines and resources.