Before Sacking the CEO, the Board Must Consider These 5 Key Points

The CEO is responsible for driving the vision of the company. But what happens when your current CEO is not doing their job right and you have to find someone new? Boards often jump the gun and don't give the CEO fair warning - opening the company up to repercussions for years to come. It is important that you ensure a smooth transition, if you want to keep investors, business partners, customers and employees confident in your company. Moreover, this will also allow the incoming CEO to move the company forward with ease. So before you sack your CEO, make sure to consider these five crucial factors:

1. Have a Termination Plan Ready

A termination plan is essential when removing a current CEO from their position. The plan should have a clear termination date and the procedure to be used to inform the CEO of their termination. Consistent clear communication will be critical, so make sure you have cross checked the termination plan with a good employment lawyer and stick to the key messages agreed. Include a timeline for everything that needs to be done to replace the CEO, including informing employees of the change. The plan should also include details of who the incoming CEO is and what makes them the most suitable candidate for the position. Don’t forget to include the date the new CEO is supposed to take office. This allows for proper planning.

2. Determine Why the Board Needs to Sack the CEO

Note down all the reasons why the board has reached the decision to remove the CEO. What are their shortcomings? Why do you believe that the company will perform better with a new CEO? Noting down these reasons allows you to fully evaluate whether the problem is really with your CEO or another source before getting down to the dirty business of effecting the sack. It also allows you to make sure that you are firing the CEO with adequate cause.

3. Engage the Outgoing Leader in Good Time

No matter the reasons for letting your current CEO go you need to appreciate the time they have served your company. Let them know of the termination in good time as a sign of respect and appreciation. Having this discussion early on will help in making the transition go smoothly later. Make arrangements for the board to debrief the outgoing CEO for an honest assessment of the company. Their opinions are still very valuable. You can then use this info to craft the new CEO’s profile.

4. Develop a Plan to Bring in the New Leader

Prepare a plan on how you will transition the incoming CEO. Appoint someone to be there to assist them in case of any challenges and to help them navigate the first few months. This will greatly help in making the orientation process fast and successful. This should be done before the new CEO is hired. It’s best to keep the outgoing CEO out of the replacement process for better transitioning.

5. Prepare the Company for the Coming Changes

Leadership changes are not always received well. Some will embrace it while others will be disgruntled. Let your staff know of the impending changes early on even before hiring the new CEO. Let key staff know that they are expected to play a proactive role in making this transition successful.

Replacing a CEO is one of the things that most boards hope that they never need to do. Unfortunately, the need arises every now and then. Proper planning before replacing a sitting CEO is the first step in a successful succession process for any board. So before you jump the gun - make sure to do your ground work. 

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