Top 5 Tips When Transitioning From NED to CEO

Some NEDs much prefer being in the business than supervising, finding it energy-zapping to read board packs on Saturday afternoons. The second part of this article shares practical insights from those who successfully made the leap from NED to CEO, offering lessons for others considering the same move. 

In Part 1, Boards: Could Your NED Be Your CEO Successor, we examine the board’s perspective on including NEDs in the CEO talent pool, highlighting the potential benefits of tapping into familiar leadership. 

1. Be Clear on the Difference in Roles  

Transitioning from a NED to a CEO role requires a fundamental shift in mindset and responsibilities. Be prepared to let go of your previous board identity and fully embrace the demands of executive leadership. 

Another NED-to-CEO found the process more difficult that they had anticipated. “I have a high work ethic and imposter-syndrome, so I work hard not to be caught out. But it was hard to go back to being an executive. I don’t think others would have known but it was quite tough to get the same level of energy as I used to have. It is hard to go back to what you were doing earlier in your career – and you don’t realise it until you’re in it!” 

The change is perhaps best illustrated by David Stewart, formerly CEO at LSL, a company who have transitioned several NEDs into executive roles, who recalled: “I guess I hadn’t really fully understood my own management style before this. I’d been a CEO twice before, but both times had been promoted from within and had immediate networks and hopefully some respect across the business.  I knew which levers to pull so to speak. As a NED, you might be close to the strategy and know something of the people.  But when it comes to knowing how things work in practice - you’re on the same journey as a newcomer, but perhaps you place pressure on yourself thinking you should know more”.

2. Ask Better Questions 

David Stewart outlined: “Transitioning from being a NED can have real advantages.  You have much more familiarity with the business and some appreciation of strengths and weaknesses, and hopefully a good grip on the strategy in place. You will also know many of the management team and have some relationships in place.

“But that doesn’t mean you know how things actually get done in practice, and you should guard against assuming too much. It’s important to ask just as many questions as you would if you were coming fresh into the business, and to be prepared to have your assumptions changed.  You might also need to change the nature of established relationships and work with people in a different way”.

But, as one NED to CEO observed: “I was keen to stay connected to the industry, which is why I took the NED role in the first place. I realised belatedly that the NEDs were shielded and spent the first 18 months [as a CEO] giving bad news”. 

Damian Arnold, CEO, Somerset Bridge Group, agreed: “The single biggest thing is ask lots of questions, so you know what you are going into. Don’t assume. As a NED you have the ability to be more authoritative, ask better questions, and hold people to account”. 

Finally, as one former CEO observed: “Don’t be defensive and do separate the NED board role for your CEO role. Yes, you were on the board and baggage matters, but it is a different job. Slow down and look at it as a fresh start”. 

3. Treat Your Board Interaction Like An Interview 

For the board to ensure the answer is right, expect a full, externally-managed process. Penny James, formerly Senior Independent Director, Hargreaves Lansdown and Co-Chair, Women on Boards Review, said: “It doesn't immunise you - it's a massive transition from NED into exec role”.  

Give thought to how you show up. Board colleagues may look at your differently, wondering if you are still as independent as you need to be. Similarly, if the executive team know you are in the process, they will they start to look at you in another way. 

4. Don’t Get Sucked Into the History  

Be mindful of the board knowledge ‘gap’. As one former NED-to-CEO observed: “Know the questions but don’t assume you know them all. Do a lot of listening, even more than you'd do if you didn’t know the business. Of course, you do have an understanding and do use that knowledge advantage to accelerate things that make a difference. But people, investors, board members, employees, executive leaders are all generally happy to move on, more than you think. A reset is ok - don’t get sucked into the history”. 

5. Do You Really Want It? 

If your candidacy gets into the media, and you are a serving executive elsewhere, that could complicate matters.

Allison Kirkby recalled: “I took a personal risk. I was thrilled to be asked to be part of the process, but I did debate whether I should or shouldn’t”. 

Odgers works with global businesses to build world-class boards that drive strategic growth. We leverage a vast talent pool to find and develop executives who align with and enhance business goals for sustainable results. We maintain individual relationships with candidates to facilitate creative career opportunities. For candidates, we stay connected on an individual basis, rather than just transactional, to enable creative career moves. 

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