Shawn Cole is the president and cofounder of Cowen Partners, with 20+ years of experience building and growing successful businesses.
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When a board approves a new CEO or CFO, the vote usually comes after a long meeting with three or four finalists. Directors debate the people in the room, but very few of them ask how those particular people got there in the first place.
A shortlist can only be as strong as the search behind it. To make sure the board sees the best of the market before they vote, directors need to make sure the search team did a thorough search.
Two Habits That Make The Shortlist Smaller
As I’ve spoken with search professionals from all areas of the industry, I hear the same two habits come up time and time again. Neither habit comes from laziness or bad faith, yet both shape the shortlist, oftentimes in ways the board never sees.
The first habit is treating the database as the market. Anyone who has run searches for a while has records on executives they’ve met, and that history is worth using to their advantage. However, the trouble begins when a recruiter starts juggling too many searches at once. This overload can cause the database to become the focus of the search itself, rather than the starting point for finding a genuine finalist.
The second habit is network-driven searching, and it can show up anywhere. Outside recruiters do it, internal talent teams do it and board members do it when they suggest a name from a former company. Trusting people you’ve worked with is natural. Everyone’s network reflects their own career, though, so it tends to stop where that career stopped.
Think about who falls outside both. There’s the COO who likes her job and hasn’t touched her LinkedIn profile in three years. There’s the division president in a neighboring industry whose experience would carry over well. Then there’s everyone the search team never crossed paths with, which in most markets is a lot of people. A search that relies on a database or personal networks naturally misses a lot of qualified candidates who could be the right people for the job.
What A Full-Market Search Involves
A full-market search looks different. It starts with a map. Before anyone picks up the phone, the team lists every company where a qualified leader could be working today, including ones in adjacent sectors.
Then the team contacts the relevant people on that map, including the ones who would never think of applying. Everyone who engages goes through the same assessment, measured against criteria the board signed off on at the start. The work keeps going until the client can honestly say it has seen who is available.
There’s nothing proprietary about this. A search firm can do it, and so can an internal recruiting team or a board committee with enough support. What matters is whether it got done, and the board is in a good position to find out.
Six Questions Worth Asking Of A Search
To find out if a search covered the market well and went beyond the bare minimum to find qualified candidates, the board can ask the search team these questions. These work for any search, no matter who ran it. After each one, I’ve added what I’d want to hear back.
1. How was the candidate pool built, and what sources did it draw from? I’d want to hear which organizations and roles were targeted and why. If the answer is mostly “our network” or “our database,” the board should keep pressing to understand how those candidates were actually surfaced.
2. How many executives were identified and contacted, compared with how many were presented? Ask for actual numbers. If dozens of leaders were contacted and four were presented, you know real filtering took place.
3. What research happened before outreach began? The team should be able to explain how it studied the company’s strategy and which criteria it agreed on with the board. When calls started before the criteria were settled, the slate usually shows it.
4. Did the search reach leaders who weren’t actively looking? Plenty of strong executives are busy doing their jobs and would never answer a posting. Find out how those people were approached and how many agreed to talk.
5. How were finalists assessed against each other, and against what criteria? Each finalist should have had the same interviews, the same reference process and the same scorecard. Otherwise, the board is comparing people who were measured differently.
6. How many searches was the person leading this one carrying at the same time? It can feel awkward to ask, but it’s fair. Research and outreach take hours, and someone running a dozen searches at once has fewer of those hours to give yours.
Good search teams don’t mind these questions. In my experience, most of them are glad someone asked.
Why This Is The Board’s Job
Few decisions test a director’s fiduciary duty the way choosing a CEO or CFO does. That duty covers the process behind the shortlist as much as the people on it.
Asking how the shortlist was built makes any search better, no matter who is running it. People tend to do more thorough work when they know they’ll be asked to walk through it later. It also gives directors something solid to point to when shareholders, employees or lenders want to know why this person got the job.
None of these questions requires the board to second-guess the experts. They just ask everyone involved to show their work. Boards that make a habit of asking these questions go into the final vote knowing what the market actually looked like, and that makes it a lot easier to stand behind the leader they choose.
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