Carla Mahieu on the Art of Attracting a New CEO

What, in your opinion, are the biggest changes in talent management and succession planning in recent years?
‘There has been a clear shift in how companies approach talent management and succession planning. Supervisory directors like to talk about strategy and financial numbers, but there now also is a much greater focus on the importance of human capital. This stems from the realization that even the best strategy cannot succeed without the right people. The discussion around talent has expanded and now includes the entire talent pipeline, not just the top positions. We now think far more about strategic workforce planning and the future of the organization. It has become something companies are continuously working on, not something which is addressed on an ad hoc basis when a company needs people.
The process has also become significantly more data driven. Instead of relying on intuition or a good conversation, we now make extensive analyses of a person’s performance, development, and potential. Although I want to emphasize that the human side should never be overlooked. Empathy, personal connection, and understanding human behavior remain vital when selecting the right leaders and building effective teams. It is about finding the right balance between hard data and human insight.
Finally, artificial intelligence is having an increasing impact on how we view leadership and talent management. AI provides us with new tools to identify, develop, and retain talent. We can now predict with much greater accuracy which traits and skills will make someone successful in a specific role. At the same time, AI is reshaping the skills we seek in leaders. We need CEOs who not only understand the implications of AI for their own companies but also for the entire industry and society. They must be capable of making ethical decisions regarding the use of AI and its impact on employees and customers. For supervisory directors, this means we need to ensure we have the expertise to assess these developments and ask the right questions of management.’

How do you see the role of the Supervisory Board when it comes to talent management and overseeing and developing company culture?
‘Many Supervisory Boards are now paying more attention to talent, not only in formal meetings and committees but also through direct interaction with employees. This is happening in various ways: by inviting people to give presentations, visiting offices and projects, and meeting staff. Some supervisory directors even form mentoring relationships with promising talents. I have also seen supervisory directors doing fireside chats during leadership development programs with the aim of meeting talent. This active involvement provides a clearer view of the talent within the organization.
As for the role with respect to company culture: monitoring and supporting it is an important task for the Supervisory Board. This is done through both formal channels, such as employee surveys, training regarding business ethics and business principles or monitoring compliance, but also through informal interactions. Our role as supervisory directors is to assess whether the company is living up to its values and delivering on its reputation. A strong company culture attracts and retains talent, while effective talent management, in turn, reinforces that culture. The two are closely intertwined.’

Is the role of supervisory directors in talent development comparable to the role they fulfil in CEO succession?
‘The involvement in talent development in the organization differs from the role in CEO succession. Talent development is more about mentoring, coaching, and providing growth opportunities, which also offers insights into the organization's culture—a factor increasingly critical in managing organizations. In CEO succession, the role of the Supervisory Board is more direct and more decisive. We are directly responsible for selecting the right person to lead the organization. So, the role of the supervisory director is completely different here.’

Let us focus specifically on CEO succession. What does the process of selecting a new CEO look like?
‘The CEO succession process has evolved significantly over the years. Today, it is viewed as a continuous process rather than something we only begin when the current CEO is nearing departure. The strategy and CEO succession are now closely intertwined. We not only consider what the company needs right now but also where it aims to be in five or ten years—the future CEO must be able to realize that long-term vision. It starts with creating a clear profile that aligns with the company’s strategy, where we distinguish between the qualities a CEO absolutely must have and those that are nice-to-haves. Afterward, we conduct a thorough analysis of potential candidates.
At the same time, we need to remain flexible because the world is changing rapidly. The ideal CEO profile might in a few years look quite different from what we think now. That is why it is essential to develop potential successors broadly, without focusing too narrowly on a single, overly specific profile. Additionally, the process should be valuable for all involved, not just for the individual who eventually takes the CEO role. Candidates should have opportunities to demonstrate their capabilities, for example through presentations, special assignment assessments, or conversations with supervisory directors. From the start, they need to be well-informed about expectations, timelines, and the criteria used in the selection process. Both the selected candidate and those who are not selected should receive feedback on their performance and areas for development after the process. This ensures that all candidates are encouraged to reflect on their ambitions, strengths, and growth areas—regardless of the outcome.’

How can you ensure a good balance between internal and external candidates in CEO succession?
‘This is a critical question in any succession process. Internal candidates have the advantage of already having a good understanding of the organization and often have a proven track record within the company. They can provide continuity in both company culture and strategy. A thorough succession process benefits from a deep understanding of these internal candidates—what have they achieved over the years? How have they evolved? How are they still developing themselves? And importantly, what are their own aspirations? On the other hand, external candidates can bring fresh perspectives and innovative ideas. They can help break entrenched patterns and identify new growth opportunities.
The right balance depends on the company’s circumstances. If the organization is performing well and the strategy remains relevant, an internal candidate may be preferable. However, if there is a need for significant change or new expertise, an external candidate might be a better fit. In practice, it is ideal to have a diverse pool of candidates. They are evaluated based on criteria derived from the company's strategic needs. Most importantly, we remain open to all options and select the best person for the organization’s future, whether they come from inside or outside the company.’

What is your view on developing multiple profiles for a future CEO, given the rapidly evolving demands of leadership?
‘This is an intriguing approach that is becoming more common. Developing several profiles can indeed be a wise strategy. For instance, a company might consider whether in the future they need a technology expert, a strong customer-focused leader, or someone with a background in sustainability. By creating different profiles, you build flexibility and prepare the organization for diverse scenarios. It also allows for the development of a broader talent pool which is of benefit to the whole organization. Also, a CEO does not, as is also the case with a supervisory director, need to be an expert on a range of relevant topics. We need, foremost, leaders who can deal with the enormous uncertainty and rapid changes in the world. CEOs who are not only strategically strong but also adaptable and resilient. They must lead an organization through digital transformations, geopolitical shifts, and societal changes while demonstrating authentic and ethical leadership. A CEO must be skilled at surrounding him- or herself with the right people and working effectively with that team. To achieve this a leader must, most importantly, have curiosity, ask the right questions and be able to energize others. Additionally, it is important for the CEO to, with the Supervisory Board, regularly assess whether she or he still is the best fit to lead the organization into the future. It requires enormous courage to say: ‘I believe my time has come to step back and pursue something new.’

Is there, in your opinion, an ideal term for a CEO to stay at an organization?
'There is no one-size-fits-all answer to this question. In general, I would say that a CEO should be able to complete at least one full strategic cycle, which often amounts to at least one appointment term. Ideally, a CEO should be able to complete two such cycles, so, about eight to ten years. This gives sufficient time to develop a vision, implement it and see the results.
At the same time, we must guard against appointment terms that are too long, because it can lead to a risk of tunnel vision or a lack of innovation.’

Is there not a potential conflict of interest when involving CEOs in their own succession planning?
‘This is indeed a delicate issue. The CEO typically is the most knowledgeable about the organization and potential successors but also has a personal stake in the outcome. Transparency and clear communication between the CEO and the Supervisory Board are essential here. We aim for a well-structured process where the Supervisory Board is actively involved and makes the final decision. It is important to give sufficient weight to the CEO’s insights, but equally important to remain independent in the evaluation.’

You were involved in recruiting several CEOs in recent years. What would you mention as the key lesson learned about managing CEO succession effectively?
‘Succession planning is not merely a business process; it is also deeply personal. Candidates are not pawns on a chessboard to use for achieving strategic goals; they have their own ambitions, concerns, and personal circumstances. Therefore, in recruiting, selecting, and appointing individuals, we should not get ourselves bogged down in technical, data-driven solutions, but also keep the personal touch. I want to re-emphasize: humanity and empathy remain important.’

This article was published in Management Scope 08 2024.