CEO Selection and Evaluation Criteria

CEO Selection and Evaluation Criteria

Arthur D. Collins, Jr. & Sophia Shaw
Managing Partners, Acorn Advisors LLC

One of the most important responsibilities of any board of directors is to select and evaluate the CEO—and in the unfortunate situation where a CEO is not preforming adequately, to replace him or her in a timely fashion. In reviewing the efforts of many successful corporations and other institutions inside and outside the United States, it is clear that a board of directors should consider a number of important criteria when conducting a selection and evaluation process for any CEO. These efforts should be deliberate, comprehensive, and interactive. A board’s decision on the most appropriate type of individual to lead an organization, whether the CEO is already in place or is being hired from inside or outside the organization, should reflect both the current and future needs of the business (e.g., over the next decade).

The CEO position is all about leadership, and the two most important leadership criteria for a successful CEO are judgment and integrity. These two characteristics should not be considered as all-inclusive determinants of success, but rather as fundamental prerequisites that overshadow other considerations. Judgment and integrity also serve as the foundation for a number of additional leadership skills that an effective CEO must possess and continually demonstrate.

The list of 25 traits that follows is based largely on personal experience and observing many successful CEOs over several decades. (more…)

For-profit and Nonprofit Boards of Directors

For-profit and Nonprofit Boards of Directors: Similarities, Differences, and Keys to Success

Arthur D. Collins, Jr. & Sophia Shaw
Managing Partners, Acorn Advisors LLC

During a recent conversation with a friend who has served on the boards of numerous corporations, cultural institutions, and civic organizations, one of us half-jokingly remarked, “When you’ve seen one board of directors, you’ve seen ONE board of directors.” Agreeing that the “seen one, seen ‘em all” adage doesn’t apply to boards, our friend went on to add an important caveat, saying, “Yes, but selecting good directors and getting the governance right makes all the difference in the world.” While it is certainly true that each board can be considered unique, every board—whether the directors oversee a Fortune 500 corporation, another size or type of for-profit company, or a nonprofit institution—benefits from conscientiously observing sound governance.

Since some confusion persists as to the factors that distinguish for-profit and nonprofit boards, even by some people who have served on both types of boards, we decided to outline some of the similarities and differences between the two. In addition, we have included several ideas on the characteristics that distinguish successful boards from those that aren’t, regardless if they are for-profit or nonprofit. (more…)