The CEO Quit: What Now?

Just when you thought things were going so well, the Chief Executive Officer (CEO) suddenly steps down. Now what? No one from either the board of directors or the professional staff saw this coming. Everyone figured that at some point, most likely after assuming the lead role as head of the organization, the CEO would eventually step down, but so suddenly? And so soon?

When this happens, it’s important to take a few steps back and ask some Big Questions, such as: What does an organization do when faced with this situation? Who breaks the news to the board of directors, the staff and the community? How does the board organize itself to move forward? Who assumes executive responsibility for the organization after the CEO relinquishes responsibility? What becomes the focus of activity in the coming months until a new CEO is hired to head the organization?

When the CEO has established a strong working relationship with the board and has developed an effective professional team then the agency will have put the mechanisms in place to fill the void until a new CEO is appointed. In the meantime, there are a number of important steps that must be taken to enable the organization to move forward after losing a respected and valued professional leader. The process relies upon both the board of directors and the entire staff to maintain a high level of professionalism within the organization and its standing in the outside community.

Of course, there is a big difference between the CEO who is liked, respected and valued versus the one who failed to build a strong standing in the agency or the greater community. In the former case, the board, staff and community will feel a real sense of loss in the aftermath of the CEO’s announcement and there will be a buzz in the community to try and understand the reason for the departure. When the CEO leaves due to personal reasons, such as retirement or wanting to be closer to one’s children or parents, then resigning from the position does not have as deleterious impact on those connected to the organization. However, when the reason behind the resignation is tension between the CEO and the board or staff then it may be prudent to craft a clearly stated message that is sent to the board, the staff and the community that reflects the image the organization desires to maintain, as well as the values it represents in the community.

It is essential for the President or Chairperson of the board to speak with the CEO and agree with the message to be developed and communicated to all those connected to the organization. The content and tone of the communication, whether verbal or written, go way beyond the actual words themselves and instead reflect how the organization chooses to portray itself and this sudden predicament. In cases where the resignation is the result of strong disagreements or internal conflicts, the message must be mindful that reputation of the organization is at stake and craft its words strategically.

In cases where the resignation is the result of tension between the board of directors and the CEO, it might be appropriate to create a “separation agreement” that defines the terms and conditions of the separation. It is best if a way is found to acknowledge difference of opinion without having to besmirch the name of either party. Of course, this is a great deal simpler when the resignation is not connected to any illegalities either on the part of the board or the CEO.

In the interim it is best if there is an appropriate staff person who is willing and able to assume responsibility for the continued functioning of the organization. A capable and appropriate professional who can step in as acting CEO on a temporary basis assures continuity to both the day-to-day operations of the organization, as well as providing stability during the transition to the new incoming CEO. There are times when this can become complicated if and when the acting CEO applies for the position on a permanent basis, however, this can be reviewed by the leadership of the agency in an appropriate way.

Once the interim administration is in place, the next item on the agenda is the appointment of a search committee to begin the process of engaging a new CEO. This can also be an opportunity to review the CEO’s role in the organization and what is either necessary or not necessary to advance the agency’s services to the community. (In a previous column I dealt with the purpose and focus of the search committee.)

While the resignation of a CEO can be a time of great disruption, it can also be a time for change and even growth. Even the most beloved and respected professional leaders have their own perspectives, approaches, and conceptual frameworks that guide them in their practice. When a CEO resigns and leaves the agency, it presents an opportunity for the board and staff to work together to reassess the organization’s needs and areas of weakness [or areas of potential change or growth]. After the shock of the current CEO’s resignation has dissipated, the opportunity arises to focus on strengthening and building the organization for the challenges it faces in the future.

Stephen G. Donshik, D.S.W., is a lecturer at Hebrew University’s International Leadership and Philanthropy Program and has a consulting firm focused on strengthening non-profit organizations and their leadership for tomorrow. Stephen is a regular contributor to eJewish Philanthropy.

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  1. says

    Credit to Steve for outlining these steps so well. Smart organizations have a SUCCESSION PLAN in place where these steps and others have been considered in advance. Beyond the sudden resignation, what about sudden health or health issues of a spouse or child, an debilitating accident or termination for cause. An organization’s board should be prepared and know the series of steps to take, who is responsible for doing what, and who to talk to. They should not begin to make up a process on the day of the announcement.