CEO Selection & Transition
Hiring a new CEO is arguably the most important role of the board, but a challenging one. According to the ACHE’s analysis conducted in 2009, the median CEO tenure is 4.16 years, and in their analysis conducted in 2006, they found that 22% of hospitals had 3 or 4 CEOs in the prior 5 years.
In contrast to succession planning, which is a shared responsibility of the CEO and Board, the CEO transition process must be driven by the Board. A comprehensive transition process involves far more than simply the selection of the candidate and should begin as soon as the incumbent CEO’s retirement or exit date is known and last through the first year of the new CEO’s employment.
The transition plan may include, but is not limited to, the following elements:
- Formation of a Transition Committee
- Communication Strategy
- Goals for the CEO’s exit year
- Stakeholder Assessment
- Selection of a Search Firm or Evaluation of Internal Candidates
- Incumbent CEO’s Final Contract
- Compensation and Benefits for the new CEO
- CEO’s integration into the community and hospital