- by Sophie Pinkoski

Leadership transitions can often be emotionally complex, especially for your outgoing CEO. They are about to leave behind something they dedicated years, sometimes decades, of their life towards. It’s hard to part from something that impacted their identity and legacy for so long. It can therefore require a careful hand to navigate the emotional aspect of the transition period. As they work through the stages of grief and process the end of this stage in their career, the departing leader may exhibit unpredictable behaviour. One such common behaviour is often the inability to let go, lingering well past their expected timeline within the organization. In these occasions, it’s up to you as the board to set boundaries to ensure a healthy, dignified transition for your outgoing CEO.

Introducing the incoming CEO will mean passing the departing leader’s tasks and responsibilities on to them.

This process of letting go can be alarming for the outgoing leader as they grapple with the loss of status and relevance within the organization, the industry, and in their professional networks. It is critical that the board keep clear with themselves, the company, and the community that there is only one CEO - it is the person that has the authority today. The incoming CEO does not have that authority, even if handover planning is underway. 

If there is overlap between the current and incoming CEO, there is a delicate balancing act of keeping the outgoing CEO engaged enough to mentor their successor and transfer relevant knowledge while simultaneously supporting them as they face letting go in the near future.

Reiterate boundaries and expectations to both leaders throughout the transition process to remind them of their specific roles in this transitional period.

One area that can be tricky is the outgoing CEO’s involvement on the board. It’s generally not recommended that CEOs stay involved with the board following their departure. It may be tempting for them to stay engaged with the organization in a different capacity, but taking a board role or advisory position complicates matters for both the board and new leader. When the former CEO lends their expertise to the board, directors may defer to their opinion over engaging with the collective discussion needed to move the organization forward. It also risks having the new CEO be seen as a lesser authority to the one that has just left the role. Meanwhile, if staff are still coming to the former CEO as the authoritative figure within the organization, it can undercut their successor’s ability to establish their own authority, thus stalling progress they intend to make. It is better that the outgoing CEO must understand their involvement within the transition period is to be within a mentorship capacity to aid their successor’s transition. 

Clarity for all involved can truly determine your next CEO’s success.

Here are things to keep in mind when setting boundaries with your outgoing leader:

Clarify everyone’s roles from the onset–– A key point in establishing boundaries is to keep lines from blurring between each leader’s responsibilities. This prevents the outgoing and incoming leaders and board from encroaching on one another’s responsibilities. The board’s responsibility centers around strategy, oversight, decision making, governance, and overseeing the CEO. Meanwhile, the current CEO manages the execution of the strategy.

On a specific date set by the board, the new CEO becomes the authority in the organization, while their predecessor’s role shifts to one of knowledge transfer and onboarding.

It’s crucial that the outgoing CEO doesn’t attempt to overstep their boundaries by asserting their influence on the new CEO. The new leader needs time and space to establish their vision and culture without the old CEO’s presence hindering them. As a board, you can alleviate the potential for split authority by setting clear expectations and timelines for both leaders, so everyone understands their role within the transition process. The key here is for the new CEO to determine the role of the former CEO. The board may have opinions on this, but it's the new leader who needs to make the final decision.

Manage the outgoing CEO’s last 100 days–– The CEO’s final 100 days are an ideal time to mine the outgoing leader for crucial organization and industry knowledge. Take the time to reflect together on what the organization needs most from its new leader and how the board can improve its support for them. This is a time to prioritize knowledge transfer. The departing leader comes with a carefully curated list of contacts, having built relationships with the donors, sponsors, and other stakeholders. Passing on this information will greatly benefit the new CEO’s influence within the organization.

The last 100 days for the outgoing leader should be to transfer what they know to the new CEO and to share their insights with the board.

Make sure that the outgoing leader feels heard and valued during these discussions leading up to their departure. They will want to know that their contribution to the organization has been meaningful, and that they can remain useful and included in the transition process. Give them the space to share the input they have. Remember, they need emotional closure at the end of their tenure. This leadership transition should be a milestone, not an abrupt cut off. Make sure their accomplishments are acknowledged both internally and publicly to celebrate the legacy they leave behind.

Avoid overshadowing the new CEO–– Successors have their own unique challenges as they transition into their new leadership role. A lingering outgoing CEO can make it more difficult for the incoming leader to establish their own credibility with their team and board, and to innovate beyond their predecessor’s legacy. Set boundaries so that the outgoing CEO understands their mentorship should be limited to meeting the new leader’s needs and filling their knowledge gaps, not to sway them in a particular direction. Balance protecting the successor’s autonomy while showing gratitude to the outgoing leader. This will ensure a good beginning for one and a good ending for the other.

Support both leaders through the transition–– Both leaders will have very different needs throughout the transition process. The outgoing CEO will require the board to empathize with the emotional toll of leaving such an integral part of their life behind. They may appreciate symbolic closure in the form of a farewell event or board recognition. At the same time, the new CEO needs to know that you intend to give them your unequivocal support from day one. They will want reassurance that they’re not alone at the top.

40% of new leaders fail within the first 18 months of their tenure, and that is often down to insufficient support.

Help guide them through those early days to strengthen their confidence and resolve. Encourage them to establish their leadership style. If you present them with the psychological safety to share their needs and ideas, they will be empowered to offer the same to their team. They can then go forward and make changes within the organization without fear of criticism or being compared to their predecessor. By empathetically acknowledging the emotional weight of the outgoing leader’s departure and pressures the incoming leader faces in their new role, you can offer a dignified passing of the torch for all involved.

Boundaries set realistic expectations for your leaders, ultimately creating ideal conditions for their success, whether they’re starting or ending their tenure within the organization. Leadership transitions can feel like a time of disruption, but approaching the process with clarity, empathy, and respect will set your organization up a period of renewal and in extension, success.

Further Reading:

Know the Boundaries Between Board and Management, Private Company Director

Escaping the CEO vs Board Power Struggle, Board Span

Four Ways To Clarify Boundaries Between CEOs And Board Chairs, Forbes

Drawing the Line: Where Does the CEO End & the Board of Directors Begin? Cowen Partners

Should a Departing CEO Remain on the Board?, Director and Boards

The chief executive's last 100 days: a Checklist for Chairs, Bayes School St George’s, University of London

Protecting the Legacy: Transition Advice for Founders, Boards and Successors, Russell Reynolds