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When choosing a CEO, ask those who work for the person if they’re right for the job. (yuuurin/Getty Images/iStockphoto)
When choosing a CEO, ask those who work for the person if they’re right for the job. (yuuurin/Getty Images/iStockphoto)

Talking Management

Transcript: The best way for a board to choose a CEO Add to ...

KARL MOORE – This us Karl Moore of the Desautels Faculty of Management at McGill University with Talking Management for The Globe and Mail. Today I am delighted to speak to the great Michael Useem from the Wharton Business School.

Mike, how can boards help choose CEO’s more effectively?

MICHAEL USEEM – This really is the first calling of the board, to get it right. Here is one particular suggestion that we have seen and documented in Glaxo Smith Klein, the big British and North America pharma company. It, a couple of years ago, was looking for a CEO successor. The chief executive said, “I’m stepping down,” and there were three people on the inside who looked really, really good and everyone kind of agreed these three candidates were the candidates. The chief executive working with the chair of the board, they had an independent chair of the board, put the three candidates – they understood who they were and everyone knew who they were it was a kind of what they would call a “bake off” – each of them had a CEO-level project and then the board members were able to witness if they did it well, how did they articulate the problem, and how good was the solution.

In some respects though, even more effective or impactful here in this case, the board asked someone from outside of the company to come in and to interview all the other senior managers who, at one point in their career, had worked with the three finalists. What a great opportunity. You are looking at people who were followers of the top three and you could ask the comparative question, “Which of the three would you want to work for? Which of the three is going to bring more to GSK, Glaxo Smith Klein, in the years to come?”

With that was a startling outcome, but the unequivocal dark horse, the third person that everyone thought was a possible candidate but very unlikely, was seen by the subordinates, by the people who worked for all three, was seen as the guy. The board with that feedback from below, like a 360 and more there, the board went with the Dark Horse and he runs GSK today, Andrew Witty is his name. To me it speaks to the process, getting away from the particular example, of a board and its members really taking a hold of the process, looking at candidates and watch what they do, don’t just listen to what they say they have done, and then talk with people below them to get an appraisal of where leadership really makes a difference and that’s with people who are following.

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