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An offer you can refuse

An offer you can refuse
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An offer you can refuse

Governance | Martin Farrell | 25 Feb 2013

Martin Farrell outlines a potential scenario for parting ways with a CEO. 

Well my offer is, I’m sure, an all-time first for civilsociety.co.uk – the first three readers who call me and say the magic words ‘Now is the time to say goodbye’ will be treated to me singing that farewell ditty made famous by Peter Cooke and Dudley Moore in 1965.

Now there’s an offer you can refuse.

And there are offers of a different nature too, which our chief executives (CEOs) may or may not refuse when it’s all just gone on too long and got just too difficult, and the relationship with the board has broken down.

I’ve seen many offers come and go as part of the CEO crisis service provided by get2thepoint for Acevo since 2002.

Such as when the board has a new chair at the helm who decides quite reasonably to take a fresh look at things. Or, after some years of letting things drift and not really keeping as close an eye on finances and mission as they should have done, a group of trustees realise they’re sailing into oblivion and decide to take action.

Or consider the situation of a board who has tried their level best to support and guide a CEO, who has been doing an excellent job for many years but who, half a year ago, ran into a series of personal life-changing traumas and slides into depression which shows no signs of lifting.

What do you do? You have already been actively helping your CEO to get him up to the standards you want and have sent him on training courses to improve performance. You have already offered external coaching to give a space to focus on work-related issues. You have already been monitoring performance with meetings every month to check progress. But in spite of it all you’re not making progress.

So… ‘Now is the time to say goodbye, Now… (yield it yield it), Now is the time to wend our way… ee’

Knowing that parting company with a CEO is even harder than recruiting (which is certainly hard enough), now is a time for clear leadership and for the board to act as one.

The board has come to a view that it does not have the time, energy or money to face the CEO in a tribunal – not a good use of charity resources.

So, enter the compromise agreement. The CEO has to have legal advice (without which the document is not legally binding). Typically there will be an offer of money in exchange for the CEO giving up their rights under a range of employment legislation – their rights are ‘compromised’. There will probably be an agreed reference, a statement about what may be said publicly by both parties and an agreement about returning and collecting any property.

It’s not pretty and is often a tense time for board and CEO alike – but it’s better than the board not fullfilling its duty to meet its mission.

Well now I’m off to rehearse in a soundproof room just in case someone is courageous enough to take me up on my offer.

Martin Farrell is chair of Read International  

 

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Martin Farrell

30 years ago Martin Farrell volunteered to help a handcraft charity in South Africa and to do church based youth work in a rough estate in Manchester.  Today he runs a consultancy.

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