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