When the Chair wants to become the Boss

Last week the New Zealand Herald revealed that, among candidates for the chief executive’s role at Greater Wellington Regional Council, the current Council Chair Daran Ponter had thrown his hat into the ring.

It’s far from the first time that this has happened, not only in local government, and it can work perfectly well – as long as the process is handled fairly and impartially. The first problem the Council faces, of course, is that the Chair is the person most likely to have been leading the appointment process up to the time the application was submitted. The important thing here is for the Council/board to act fast and decisively.

If any board member/councillor wants to apply for an executive role in their organisation, they must immediately step right away from the governing body. They can no longer remain (or be seen as) a member of the governing ‘club.’

I’ve been on several boards where a board member has applied for the CEO’s role – and has been appointed. In my experience they may indeed be the perfect candidate:

  • They’ll know the issues the new CEO will need to deal with, 
  • They’ll know what’s expected of the appointee (they may well have been involved in writing the position specification), and 
  • They’ll know the board and the board will know them – which can be a huge advantage for someone coming into the top job. 

But you need to avoid the appearance of favouring that candidate or of giving any sense that the appointment is a ‘done deal.’ I can recall one occasion as a board chair, when my deputy phoned to ask whether I’d consider his application for the vacant CEO’s role. We had gone through a search and appointment process and had been ‘underwhelmed’ by the first round of candidates, so we’d re-advertised the role. I replied that I was delighted he’d applied, but we still needed to follow our proper process, for two main reasons: 

  1. We needed to be fair to any new candidates – not simply favouring the one we knew;
  2. If we appointed him and it didn’t work out, we’d be open to the accusation of not having run a more robust process, rather than assuming this was the right person simply because we knew him. 

All well and good, when the person is appointed, and they make a success of the role – as I’m pleased to say this person was and did.

What if … ?

However, the important question for Greater Wellington is – what if Mr Ponter isn’t successful, and the Council appoints someone else as CEO? What happens then?

  • Can he come back into his role as Council Chair? 
    • After all, having been a candidate, he’d be in the awkward position (almost certainly) of disagreeing with the Council’s biggest decision this year. To put it more bluntly, would he have a vested interest, even sub-consciously, in seeing the new appointee fail?
  • Can he credibly even return to the Council? 
    • This question doesn’t seem to occur to many people, but again he’d be in the position of disagreeing with Council’s biggest decision; everyone around the table would know that … and he’d know that they knew it. In a legal or constitutional sense, I imagine there’s no way of preventing him from returning – after all he was elected for three years – but can it work in practice? How uncomfortable would that be for everyone at the table?

Several years ago, I was on a board that was in this exact position, when our Chair told the board he’d like to apply for the CEO’s role – with the added complication that this was the board of an industry representative body and our Chair was also chief executive of one of our member organisations.

A couple of board members went through the usual motions of saying he’d need to step aside from the board during the process. I then asked the ‘what if?’ question, and they realised that it was slightly more complicated. After a short discussion, the rest of the board agreed that, if he was unsuccessful, he couldn’t return as Chair. We also agreed that even returning as a board member could be a problem. If that had been the result, it would have put him in the awkward position of having to explain to his own board, as their CEO, why he’d stopped chairing our board and possibly why he’d had to leave our board completely – when none of his board had any idea that he was applying for a new role. 

I was relieved, for him as much as for us, when we sat him down and explained this dilemma. The consequence of not being successful had never occurred to him and it didn’t take long for him to withdraw his application. 

An important part of any board member’s role is to think ahead and to ask ‘What if …?’ and ‘What next …?’ 

Many years ago, when I was learning to fly, we had a poster displaying the definition of the superior pilot: 

  • ‘The superior pilot is the one who applies their superior judgment to avoid situations that would require their superior skill.’ 

Being a director (or a Council member) is no different.

______

If you’re reading this post on LinkedIn and want to follow my blog, you can do so at my site chairingtheboard.com

Published by westlakenz

Experienced board leader and chair; Teacher, mentor and adviser to boards, chairs and CEOs; Governance presenter, commentator and conference speaker.

4 thoughts on “When the Chair wants to become the Boss

  1. Highly insightful commentary around the challenges for Boards. Cooperative Business NZ is really looking forward to hosting our first ‘Chairing the Board’ session being facilitated by Richard Westlake on 3 May.

    We have a long history of partnering with Westlake Governance and have enjoyed seeing the value our members derive from attending these programmes. If you’d like to join this session, we still have spaces available. For further details go onto the following link. https://nz.coop/chairing-cooperative-board

    Liked by 1 person

  2. Hi Richard,
    Thanks for another blog post – too long between drinks 🙂
    I witnessed the tail end of the (unique?) process that occurred at Tower in New Zealand where a Board member became the CEO for a few years before returning to their position on the Board (after a period of gardening leave from Board responsibilities). I won’t (can’t) comment on the success or otherwise of this but I do agree with your comments in the blog about the need for careful consideration and navigation of potential issues arising from this type of move.
    Looking forward to your next post.

    Like

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