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CEO & senior appointments

What does it really cost to appoint a CEO?

An appointment is not a search transaction. It is an allocation of future authority, attention and risk.

Stefan Peetroons in conversation

01

The obvious question

Most boards approach this as a budgeting question: what will the search, the assessment and the package cost, and is that reasonable for a role of this size? It is a fair question. It is also the smallest part of the answer.

02

The deeper decision

Appointing a CEO is the decision to hand one person a large share of the organisation’s future authority, attention and risk. For several years, strategy will be interpreted through their judgement, talent will gather around or drift away from them, and the board’s own credibility will be tied to the choice.

Seen that way, the process cost is real but secondary. The useful question is not only what the appointment process costs. It is what level of decision quality the stakes justify.

03

What changes the answer

The mandate
A continuity appointment and a transformation appointment are different decisions, even under the same title.
Ownership
Family, founder, private equity and listed ownership each change who must agree and what the CEO is truly accountable for.
Timing
A planned succession buys evidence; an urgent replacement spends it.
The internal bench
Strong internal options change the economics of the search — and the cost of passing them over.
Reversibility
The harder a decision is to undo, the more decision quality is worth paying for.

04

What it really costs

Direct cost

Search, assessment, advisory and legal support; relocation and sign-on arrangements where relevant; the package itself. Visible, budgeted and usually discussed first.

Decision cost

The time of the chair, board members, shareholders and executives involved — interviews, alignment, deliberation. Senior attention is the scarcest resource in most organisations, and an appointment consumes a great deal of it.

Failure cost

Strategy delayed or reversed, senior departures around a poor fit, a second search, severance, and the quieter cost of decisions made badly while the problem is recognised but not yet acted upon.

Value and risk

Set against the cost is what the right appointment makes possible: a strategy carried with conviction, a team that strengthens, and a board that can govern rather than compensate.

What determines external cost?

  • Scope and complexity of the role
  • Market scarcity of the profile
  • Geography and language requirements
  • Depth and breadth of the search
  • Depth of assessment and referencing
  • Governance complexity — the number of stakeholders whose agreement is needed
  • Onboarding and transition support after appointment

Market pricing depends on scope and context, so no figures are given here. Sourced reference points may be added when they can be verified.

05

What most people underestimate

  • The vacuumMonths in which important decisions are deferred ‘until the new CEO arrives’ are rarely counted, but they are paid for.
  • Second-order departuresA misjudged appointment often costs the two or three people who were holding the organisation together.
  • Board credibilityEmployees, lenders and investors read the appointment as a statement about the board’s judgement.
  • The first yearSelection does not end at signature. Poorly supported transitions turn sound choices into fragile ones.
What level of decision quality do these stakes justify?Work through the decision →

06

What evidence actually matters

What tends to persuade

  • A familiar name or a strong presentation
  • Experience in a similar-sized role
  • Chemistry with the person chairing the process

What tends to predict

  • Fit between the person and the specific mandate ahead
  • How they reason when the answer is not obvious
  • Evidence of growth across contexts, not only success in one
  • Explicit agreement on the risks the board is choosing to own

What persuades is not irrelevant. It simply tends to weigh more in the room than it deserves.

07

What to ask next

  1. 1What, specifically, must this CEO change — and what must they protect?
  2. 2What would a wrong appointment cost us in the next three years, not only in fees?
  3. 3How much of our evidence is about the candidate’s past, and how much about our future?
  4. 4Who must agree, and have they agreed on the mandate before meeting candidates?
  5. 5What support will make the first year succeed?

From the other side of the table

“As our company grew, Stefan helped me answer two connected questions: what should my own role become as owner, and what kind of leader did the business need next? He challenged my initial assumptions, translated our future needs into a clear leadership mandate and helped us make a well-considered appointment. His strength is getting underneath the obvious question. He analyses sharply, puts the trade-offs on the table and helps you reach a decision that fits both the business and the people involved.”
Owner & Shareholder · Business Services

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