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When succession planning isn't enough: choosing a new CEO

The Chief Executive Officer in any California corporation holds authority that could make or break the business. If the succession plan is unsuccessful in setting up a replacement for an out-going CEO, the process of choosing a new one may involve many risks to the company's future.

What potential pitfalls should a board of directors be aware of when surveying candidates?

Failing to identify the CEO's specific responsibilities

Forbes explains that a board cannot identify the right candidate if members do not agree on the duties the CEO will perform. Simply stating that the candidate should be prepared to lead the company forward or increase the shareholder value is not specific enough to determine whether a candidate will have what he or she needs to fulfill the goals of the position. 

Placing too much value on experience

Entrepreneur magazine notes that if the company already has a strong executive team, it may not need a CEO with years of experience in that particular role. In fact, including a certain amount of experience as one of the hiring criteria may disqualify someone who would be an ideal fit. Specific experience to the duties of the position may include factors that are common to other positions, so a person who has little experience as CEO, but extensive expertise in other areas, may be the right choice.

Assuming the right candidate is outside the company

The board may feel that the company needs a shake-up, or that new ideas are the most important elements the new CEO can bring to the job. However, if things are running smoothly, someone on the management or administrative team who already understands company culture, operations, and goals and objectives may be the right choice. The internal candidate may also have the other qualities that the company needs, such as the ability to challenge the status quo and take the business in a new direction.

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