Possibly the most crucial decision that a not-for-profit organisation board will make is the selection and appointment of the group's CEO*. The ability of the organisation to survive and thrive may well depend upon this choice.
While a mediocre CEO may succeed at keeping the organisation ticking over, a great CEO can:
- Set and encourage excellence throughout the organisation.
- Maintain morale and provide inspiration.
- Keep the organisation focused on its goals.
- Boost support from the community, sponsors, funders and partners.
In undertaking the task of finding a great CEO for your organisation, you need to keep in mind that to at least some degree, one group's trash is another group's treasure – i.e. a great CEO is not really a great CEO unless they suit your group.
There are two major factors that will decide whether or not your search is successful – knowing what you want and how you go about finding it.
Form a committee
Your first step should be to form a CEO search committee. Although the full board will ultimately be responsible for making the final decision, the search committee will lead the process and help to narrow down the options.
Know what you want
It is vitally important that your organisation knows what it wants before it begins its search. Knowing what the group is trying to accomplish will make the task of choosing someone to take you there that much easier.
- Review your strategic plan to pin-point your organisation's short-term and long-term goals. This will help you identify the qualities that will help you achieve your aims.
- Be prepared for the possibility that in reviewing your group's goals you may discover that the new CEO may need to have quite different qualities to the departing CEO.
Articulate what you need
The next step is to set out exactly what skills, experience and other qualities that you want your group's new CEO to have. Think about:
- What do you want the CEO to do and how will you know if s/he has been successful?
- What sort of person do you need to attain your group's goals?
- What are the key values that the new CEO should have?
- Are there specific skills or knowledge that are crucial to existing programs?
- Are there minimum educational standards you require?
- What sort of experience is needed?
- What experience is non-negotiable?
Be as specific as possible. For example, if fundraising is the key issue for the organisation, it may be imperative that the key selection criteria would include proven experience in this area, such as government lobbying and the ability to secure corporate sponsorship. If you are planning to expand the organisation interstate, it would be important to hire someone with appropriate networks in that state and experience in establishing new offices.
Write a position description
Your position description should cover the following points:
- Responsibilities. There will responsibilities that are specific to your organisation but typical responsibilities for a not-for-profit CEO include:
- Board administration and support
- Program, product and service delivery
- Financial, tax, risk and facilities management
- Human resource management
- Community and public relations
- Education, skills and experience necessary to fulfill the position. These will depend on the requirements you have identified earlier.
- Remuneration. The package you are offering must be capable of attracting a suitable candidate but must not demand so large a proportion of the organisation's resources that it compromises its ability to realise its plans and programs.
Develop a candidate profile
The candidate profile should include more information than the job description, explaining in detail the sort of person you are looking for. It will be extremely useful in the advertising, interview and final selection phases.
Desired or essential qualities could include:
- A deep understanding and empathy with your organisation's mission and values
- Ability to motivate and inspire staff and volunteers
- Financial and physical resource management skills
- Experience in promotion and advocacy to external stakeholders and the general public
- Effective human resource management
- Fundraising and political lobbying
- Board development
- Innovation and growing an organisation
Begin your search
You have two choices here – your committee can handle the search itself, or if you have the funds you can hire a professional headhunter.
If you opt for the latter option you will need to:
- Advertise the position. This requires a bit of thought as where and how you advertise may well dictate the final result. More applicants are not necessarily better applicants so you need to be quite selective about how you spend your advertising dollar. Choose the medium that is most likely to be read by the sorts of people you're looking for. Likely venues for advertising include
- Newspapers – local, state-wide or national
- Trade and general magazines
- The internet
- Ensure your search committee is up to date in employment law. It is a complex area of law and if you are not aware of the basic rules of the game it is not difficult to make yourself vulnerable to court action. Care must be taken in advertising, interviewing and offering contracts.
Narrow the list
Pare down the application pile by comparing each against the minimum qualifications listed in the position description.
For the second cut, rate the quality of each applicant's experience against the candidate profile; this should leave you no more than eight or 10. These are the people you should contact to invite them in for an interview. Inform the unsuccessful candidates in writing that they have been unsuccessful.
The interview is the opportunity for the committee to more meaningfully assess the qualifications, experience, interpersonal skills and values of the candidates. In order for this to happen the candidate needs to be made to feel at ease and the committee should be well briefed in terms of the information it seeks and the questions it needs to ask. The committee also needs to:
- Allot sufficient time – an hour is the minimum necessary for a CEO position, but care should be taken to ensure that the interview is not so long as to become an ordeal for the committee or the candidates.
- Make sure the same people are present during each of the interviews to ensure consistency.
- Draw up a list of challenging and open-ended questions to be used by committee members. This ensures thoroughness and fairness.
- Appoint one person as the chair to lead the interview.
- Ensure that the candidate is sufficiently comfortable – provide fresh water and start off with some informal questions that help to establish a relaxed atmosphere.
After each interview allow some time for each panel member to rate the candidate individually (using a score out of five for each criterion can be useful). When all of the interviews have been done you can use the individual scores or observations to inform the discussions surrounding final selection.
Reference check & final selection
Sometimes a clear candidate will emerge as the top choice and the committee may proceed to checking the references of the preferred candidate.
Most often, however, you will find that two or even three candidates appear equally desirable. In these cases, you may need to hold a second round of interviews, perhaps by the full board instead of just the committee members.
At times, the final selection between two or three candidates will depend on their referees' information.
The importance of checking references of the final short-listed applicants cannot be over-emphasised. It is a good idea to develop a checklist of questions to be asked and to restrict the checking process to just one or two members to ensure consistency.
Before embarking on the reference checking process, the committee should consider the following points, which have practical, as well as legal, implications:
- Applicants have the right to state that their current employers not be contacted without their permission. Failure to honour this requirement could possibly see the applicant losing their job or being placed in a disadvantaged position, which could result in legal liability and/or legal proceedings.
- Current and former employers can become liable if they provide information deemed potentially damaging to the employee. Many protect themselves by providing only profile information such as positions held and dates of employment.
- Many potentially excellent employees fall foul of political machinations in their former employment. This can often be more a question of internal politics and poor "fit" than job competence. Be wary, therefore, of negative references.
- Committee members should be reminded of the confidentiality rights of the applicants and the need to be cautious in passing on information about their application or past employment history to referees or social contacts outside the committee.
The committee must now make a recommendation to the board for approval. The selection committee should try to present a united front in its recommendation as dissension at this point makes the process difficult for the board.
Assuming the recommendation is accepted, consideration must now be given to determining the terms of the offer that might be made to the successful candidate, including salary, benefits, and other contractual arrangements.
It is a common practice to make a verbal offer and, once accepted subject to a specific offer, a written offer can be sent. When this negotiating process is completed a letter of appointment should be drafted and sent to the candidate with provision for copies to be signed indicating acceptance.
* In this help sheet we use the term "CEO" but it is intended to apply to whatever name your group has for its head person (coordinator, general manager, chief executive, etc.)