Let’s test the market

Appointing a new CE starts with a robust end of term review.

Mike Stenhouse

People in governance roles often say that appointing the chief executive is the most critical decision they will ever make in their governance career. Certainly, this is no truer than in local government when many councillors find themselves appointing a chief executive for the first time in their careers. The stakes are high.

I have had the privilege of working on over 30 local government chief executive appointments during my career, which has given me some unique insights and learnings about this process.

In the event that the council’s chief executive has resigned or is retiring, the appointment process and the message to the market and potential candidates is very clear: it’s an open process.

More complex, however, is the situation where the incumbent chief executive is seeking reappointment. Often, of course, council may be entirely happy with the performance of the incumbent but there is naturally a desire to test the market.

Is there, out there somewhere, a true ‘gem’ of a chief executive who might add a dimension that is highly relevant to the future challenges to be faced?

Clearly, the end of term is often an anxious time for incumbents, who find themselves in the market when they are perfectly happy in their job and feel they are contributing well. Of course, this can often lead to a situation where a leader may be reluctantly looking at other opportunities when their preference is to remain.

COMMUNITIES DESERVE THE VERY BEST CANDIDATES SOURCED THROUGH A ROBUST AND TRANSPARENT PROCESS.

The Local Government Act requires councils to undertake an end of term review not less than six months before the end of the contract. Amongst other things the review must assess the performance of the chief executive, his or her skills, as well as what the council requires in the future.

In this type of situation, what is often missing as a result of this review – and prior to the recruitment process – is a clear and robust signal to the incumbent that they either have, or do not have, the confidence of the council.

It is preferable that an incumbent who does not have support of council, knows this before the new recruitment process is underway.

Further, it is well known that senior candidates in local government will be reluctant to contest an appointment when it is known, as is often the case, that the incumbent intends to reapply. The exception to this, of course, is when the market perceives that council really wants a more appropriate skill set in the leadership role.

Candidates outside the local government sector will equally not apply if they know, or suspect, that the incumbent will be reapplying. Quite simply, the time and effort to contest a chief executive appointment is huge, and candidates will only apply if their application is seen to be seriously considered.

So, what is the learning here? How do councils really get the opportunity to test the market?

In my experience it all starts with a robust end of term review. What are the key issues and challenges within the organisation and the community, and what are the large projects that need specific insight?

Critically, does your incumbent have the skills and knowledge required? Does he or she have the leadership attributes that fit your organisation’s values? Finally, does your incumbent have the trust and confidence of council?

Chief executive roles in local government are very complex and rewarding, and communities deserve the very best candidates sourced through a robust and transparent process. This requires a clear message to both the incumbent chief executive and the market, so the way forward is clear and objective.