How to Hire a CEO: A Complete Guide for UK Companies

Hiring a CEO is the most consequential appointment a board makes. The decision shapes the company’s strategy, its culture, its commercial direction and the way it handles the next five to ten years. It is also the appointment where the gap between how a candidate looks at offer stage and how they perform in the role is widest. That is partly because the job is hard to assess from outside it, partly because boards under-specify what they need, and partly because the strongest CEO candidates are evaluating the company as carefully as the company is evaluating them. Boards that run a CEO search the way they would run a senior hire one level down usually get a different result from boards that approach it deliberately, with the time and seriousness the role deserves.

This guide is written for chairs, founders, nomination committees and major shareholders working through CEO succession. It covers when to start, how to build the role specification, who is in the candidate pool at different stages of company development, whether the answer is a permanent, interim or fractional appointment, how the search should run, how to assess candidates, how to structure the package, which governance and legal checks apply, and what the first hundred days should look like. It reflects how we run CEO recruitment for owner-managed and private equity-backed businesses, scale-ups, mid-market companies and corporate subsidiaries across the UK. For CEO appointments at FCA-regulated firms, where the role is a Senior Manager Function, our SMF1 CEO hiring guide covers the regulatory layer in detail.

CEO searches tend to go wrong in predictable ways. The board has not agreed what it needs from the next CEO before the search begins, so the brief shifts as candidates are interviewed and the strongest people lose interest in a process that does not seem to know what it wants. The package is built around the company’s own precedents rather than the market it needs to hire from, so the offer stage produces surprises. The relationship between the chair and the new CEO is left to define itself, and the first hundred days are spent working out what should have been agreed before the appointment. None of this is hard to fix, but the work has to be done before the search opens, not halfway through it.

When to start a CEO search

The most important decision in a CEO search is when to start it, and most boards start later than they should. From the decision to begin succession to the new CEO’s first day, a permanent CEO appointment commonly takes somewhere between five and seven months, and longer where the preferred candidate has a long notice period. Searches that only begin when the company urgently needs a new CEO compress that timeline, with predictable results: the candidate pool is narrower because the best people are not actively looking, the negotiation is harder because the company is on the back foot, and onboarding is rushed because the outgoing CEO has already gone.

A healthier rhythm is to begin succession planning two to three years before the current CEO is expected to leave. That does not mean running a search for three years. It means having an explicit succession plan, identifying internal candidates who could be developed into the role, mapping the external market from time to time, and having a working relationship with a search firm that knows the business well enough to move quickly when the formal process starts. Our guide to CEO succession planning for UK boards sets out how to build that plan in practice.

For listed companies this is not only good practice. Provision 17 of the UK Corporate Governance Code 2024, published by the Financial Reporting Council, expects the nomination committee to lead the process for board appointments, to make sure plans are in place for orderly succession to both the board and senior management, and to oversee the development of a diverse succession pipeline. The 2024 Code applies to financial years beginning on or after 1 January 2025. Private companies are not bound by it, but many PE-backed and larger owner-managed businesses use it as a reference point for how a well-run board should handle CEO succession.

For boards facing CEO succession without that earlier work, the question becomes how to manage the gap between the ideal timeline and the one the situation allows. Two practical steps help. The first is to engage a search firm before the role is formally announced, so candidate identification is happening in the background while the board finalises the specification. The second is to plan the interim arrangement: usually a member of the existing executive team or an experienced interim CEO covering the period between the outgoing CEO’s departure and the new CEO’s first day. Boards that skip this often make the wrong permanent appointment because the pressure to fill the seat overrides the rigour of the assessment.

Building the role specification

The role specification frames every conversation with every candidate. It should answer four questions clearly. Most specifications handle the first two well and the second two badly.

• What does the company need this CEO to deliver? The commercial brief: strategic priorities, growth targets, transformation needs, market position. Most specifications already do this reasonably well because it is the question the board has thought about most.
• What does the company look like under this CEO in three to five years? The forward picture: the scale the business is operating at, what the executive team looks like, what the company is known for, and what the relationship with shareholders looks like. Specifications that set this out clearly attract candidates who can engage with the direction of travel, not only the current state.
• What is the relationship with the chair and the board? This is where specifications most often fall short. The chair–CEO relationship is the most important working relationship in the company and the one most likely to cause friction if it is not deliberately set up at the start. Good specifications describe how the chair sees the CEO role, how often they expect to meet, what those discussions should cover, and where the boundary sits between chair territory and CEO territory.
• What does the company not need from this CEO? The negative specification: things the previous CEO did that the next one should not, or priorities the board has deliberately dropped. Strong candidates probe this, and a specification that is honest about it carries more credibility than one that presents the role only in positive terms.

The best specifications are also honest about the current state of the business, including the matters the new CEO will have to deal with in year one: regulatory issues, weaknesses in the executive team, customer or commercial problems, technology debt, succession gaps elsewhere in the senior team. Candidates who discover these in their first ninety days, having not been told during the search, rarely react well. Candidates who are told upfront and still take the role arrive with real commitment to the work. If you are starting from a blank page, our CEO job description template, linked below, is a useful base to adapt.

It also helps to decide early who owns the search on the board side. In most companies that is the chair, supported by a small nominations group or, in a listed company, the nomination committee. In founder-led and PE-backed businesses the major shareholder or investor director usually needs to be part of that group from the start, because their view on the brief and the package will decide whether an offer can be made.

The candidate pool: who is genuinely available

The CEO candidate pool varies a great deal by company size, sector and ownership. Five broad pools come up again and again.

• Sitting CEOs at peer companies. The most common pool: people currently running a business of similar size, complexity and sector position. They have shown they can do the job, they understand what it involves, and they bring direct sector knowledge. The difficulty is that the most credible people in this pool are rarely looking, so the approach has to be made discreetly and the case for the move has to be strong. A good search firm will know who in this pool is open to a conversation.
• Executives below CEO at larger companies. The natural step-up pool: a COO, CFO or divisional MD at a business one or two sizes larger, looking for a first CEO seat. They bring depth from a more demanding environment, with the trade-off that the company is partly backing their potential. Searches in this pool need deep referencing. The question is not just whether the candidate is capable but whether they are ready, and references from chairs, CEOs and boards they have worked with provide the evidence. The move from finance director to chief executive is a well-trodden route, and it is worth understanding why if a CFO is on your shortlist.
• Founder-CEOs and serial entrepreneurs. For PE-backed and growth-stage businesses, people who have founded and led companies through growth are a distinct pool. They bring ownership and drive, with the trade-off that the operating discipline of a more established company may be a different muscle from the one they have used most recently. References focus on how they handled the move between stages.
• Turnaround and transformation specialists. For companies in restructuring, recovery or sector consolidation, candidates with specific turnaround experience can be the right answer. The pool is small, the people in it are usually well known in their industries, and the conversation often starts before any formal mandate exists.
• Internal candidates. The most under-considered pool in many searches. A member of the current executive team who has been developed for the role, or a leader from elsewhere in the group. Internal candidates know the business, but they are known to it in their current role rather than as the future CEO. Good succession processes test internal candidates against external comparators rather than treating internal succession as either the default or the fallback.

For each pool the question is not only who is in it, but who is available now. The most credible candidates usually have several options at any one time, and the companies that win them are the ones that move with purpose and present the role in a way that respects the candidate’s time and standing. Confidentiality matters here as well: a sitting CEO will not engage with a process that might leak, so the search firm, the board and any shareholders involved need to agree early how candidate names and the search itself will be handled.

Permanent, interim or fractional CEO?

Not every CEO vacancy calls for an immediate permanent appointment. Before opening a search, the board should be clear which of three models fits the situation.

• Permanent CEO. The right answer when the strategy is settled enough to write a clear brief and the board has the time to run a proper process. Most of this guide is about the permanent appointment.
• Interim CEO. A full-time, fixed-term leader who can be in post far faster than a permanent hire. Interim CEOs are used to cover an unplanned departure, to stabilise a business before a permanent search, to lead a turnaround or a sale process, or to give the board time to decide what the permanent role should look like. Private equity sponsors use them often when a portfolio company CEO leaves or a value-creation plan stalls.
• Fractional CEO. An experienced chief executive working a set number of days a month. A fractional CEO suits smaller and founder-led businesses that need senior judgement and structure, but cannot yet justify, or do not yet need, a full-time CEO. It is also a common route for founders who want to step back from day-to-day leadership gradually.

These models are not mutually exclusive. An interim CEO can hold the business steady while the permanent search runs, and a fractional arrangement can become permanent if the company grows into it. What matters is that the board chooses the model deliberately, rather than defaulting to a permanent search because that is what was done last time, or to an interim because the board has not yet agreed the brief.

The search process: what good looks like

A well-run CEO search has six phases. Each needs to be done deliberately rather than treated as an administrative step. The durations below are typical ranges, not promises; they depend on the market, the brief and how quickly the board makes decisions.

Phase 1: The brief

Usually two to three weeks. The chair, the board and the search firm work through the role specification, the candidate pool, the package envelope, the timeline and the assessment process. The aim is not just to produce a document but to get everyone involved agreed on what the search is for. Searches that rush this phase usually pay for it later.

Phase 2: Market mapping and candidate identification

Usually four to six weeks. The search firm maps the relevant pools, identifies named candidates and begins discreet engagement. The board sees regular updates on the shape of the market: which pools are strongest, where the gaps are, and who is genuinely open to a conversation. At this stage the engagement is exploratory and candidates are not yet in a formal process.

Phase 3: Shortlist development

Usually three to four weeks. The strongest people from the mapping are engaged formally and go through structured assessment with the search firm. The shortlist that comes out of it is typically four to six candidates: enough to give the board real choice, few enough that each can be assessed properly. A shortlist much longer than six often signals that the brief was not tight enough.

Phase 4: Board interviews and assessment

Usually three to four weeks. The shortlist meets the chair, the wider board and, where relevant, major shareholders or the PE sponsor. Assessment should be structured rather than driven by impressions: competency-based interviews, case discussion of real challenges the company faces, and references taken in depth. Our executive interview guide for boards covers how to design that process. The board makes its decision at the end of this phase, not informally during it.

Phase 5: Selection and offer

Usually two to four weeks. The preferred candidate receives an offer, it is negotiated and accepted. Package, equity, notice period, start date and the timing of board appointment are all settled here. Boards that have not agreed the package envelope in advance often find this phase dragging as the offer is reworked.

Phase 6: Notice period and handover

Anything from four weeks to six months or more, depending on the candidate’s notice terms. While the candidate works their notice, the company prepares the onboarding plan, the handover from the outgoing CEO, introductions to the board and the first hundred days. This is where succession planning either delivers the value of the earlier work or fails to.

Boards can shorten the overall process, but compression usually costs either candidate quality or onboarding rigour, and sometimes both. The more useful question is where time can be saved safely: usually in faster board decisions between phases and in agreeing the package envelope before candidates are met, rather than in cutting market mapping or referencing.

Assessment: how to evaluate CEO candidates

CEO assessment is harder than other executive assessment because so much of the role is difficult to observe directly. Three dimensions matter most.

The track record. What the candidate has actually done: the businesses they have run, the strategic decisions they have led, the financial results they have delivered and the teams they have built. In-depth references are the evidence here. That means structured conversations with former chairs, board members, senior colleagues and significant shareholders, not one-line endorsements. We recommend taking references across several roles, including people the candidate has not put forward, rather than relying only on the two or three names they volunteer.

The quality of judgement. How the candidate makes decisions, especially under uncertainty. Case discussion of real issues the company faces, such as a strategic choice the board is weighing, a capital allocation question, a gap in the executive team or a shift in the market, brings this out far better than generic competency questions. Strong candidates engage with the specifics. Weaker ones fall back on frameworks or retell what they did elsewhere. Our list of CEO interview questions includes examples of what strong answers look like.

Fit with this company’s situation. A CEO who was excellent in one business is not automatically right for another. Sector experience matters, but sector adjacency often matters more: someone who has run a similar-sized company in a related sector can be a better fit than someone who has run a much larger company in exactly the same sector. Stage matters, because scale-up CEOs and mature-business CEOs are different. Ownership matters, because PE-backed CEOs work differently from corporate-subsidiary CEOs and from those reporting to founder shareholders. The assessment should test each of these explicitly.

Three things tend to mislead CEO assessment. Personal chemistry with the chair can outweigh the evidence on fit if the process is not built to surface it. Looking for someone like the predecessor is rarely useful because the company’s situation has moved on. And marking down candidates who do not interview brilliantly can mean missing people whose strengths are operational rather than presentational. Boards that know about these traps assess more rigorously.

Compensation: structuring the package

CEO packages in most UK companies have four parts, and each affects the others. They work best when designed together rather than negotiated one piece at a time.

• Base salary. The fixed cash element. It varies widely with company size, sector and ownership, and it anchors the rest of the package. The right reference point is the market you are hiring from, not the outgoing CEO’s salary. For listed companies, directors’ pay is subject to the shareholder-approved remuneration policy and public disclosure, which narrows the room for negotiation.
• Annual bonus. Performance-related cash, usually expressed as a percentage of base and triggered by financial and non-financial measures. Targets should be ones the CEO can genuinely influence and should not reward short-term results at the expense of long-term value. A sensible mix combines financial measures such as revenue, EBITDA and cash with strategic milestones, customer outcomes and people measures.
• Long-term incentives. Equity-linked reward, usually vesting over three to five years. In listed companies this means share options, performance share plans or restricted shares. In private companies it can be direct equity, sweet equity in PE structures, or phantom equity that tracks value. In PE-backed businesses the equity is often the largest part of the CEO’s potential reward, so its design carries real weight.
• Benefits and other terms. Pension, private medical cover, car allowance, life assurance and relocation support where relevant. These rarely drive the headline negotiation, but they signal how seriously the company takes the hire.

Two further issues come up in almost every CEO negotiation. The first is notice and termination terms, which matter in both directions: the company wants protection against an abrupt exit, and the candidate wants protection against being removed without a proper transition. Six to twelve months’ notice is common at CEO level, and it directly affects your start date. The second is buy-outs of unvested awards the candidate would forfeit by leaving their current employer. These are common at senior level, can change the economics of the offer materially, and should be addressed deliberately rather than as a late add-on. Agreeing an overall envelope before candidates are met, with a clear view of who on the board can approve movement within it, avoids most offer-stage problems.

Governance, legal and regulatory checks

A CEO is almost always appointed to the board as a director, and that brings duties and formalities that the board should plan for before the offer is signed.

Directors’ duties. As a director, the new CEO takes on the general duties in the Companies Act 2006, including the duty under section 172 to act in the way they consider, in good faith, most likely to promote the success of the company for the benefit of its members as a whole, having regard to employees, suppliers, customers, the community and the long-term consequences of decisions. Strong candidates will ask how the board weighs those interests in practice, and it is worth having a clear answer.

Companies House identity verification. Since 18 November 2025, Companies House requires directors to verify their identity. New directors must verify before they can be appointed, and existing directors confirm their verification with the company’s next confirmation statement during a 12-month transition period. Build this into the onboarding timetable so the appointment can be filed on the start date without delay.

Regulatory approval at FCA-regulated firms. If the company is authorised by the Financial Conduct Authority, the CEO role is usually the Chief Executive function (SMF1) under the Senior Managers and Certification Regime. The FCA’s Senior Managers Regime guidance is clear that senior managers need FCA or PRA approval before they start, and every Senior Manager must have a Statement of Responsibilities. That approval period has to be built into the timeline, the offer should be conditional on it, and the candidate’s fitness and propriety needs to be assessed with the regulator’s standards in mind from the shortlist stage. The regulators have been consulting on changes to SMCR, so check current requirements and timings at the point you run the search.

Pre-appointment checks. Whatever the sector, the board should verify qualifications and directorships, run appropriate background and credit checks with the candidate’s consent, and confirm there is nothing in the candidate’s current contract, such as restrictive covenants or a long garden leave clause, that would stop them starting when expected.

Onboarding: the first hundred days

The first hundred days are where the work done before the appointment either pays off or does not. Three things usually decide the outcome.

The chair–CEO working relationship. The most important relationship in the company, and the one that sets the tone for the new CEO’s first year. Good onboarding includes structured time between the chair and the incoming CEO before the formal start date, covering the chair’s view of the business, the boundaries between the two roles, how often and how they will work together, and anything from the previous CEO’s tenure the new CEO needs to understand. Leaving this to settle itself tends to create friction that compounds over time.

The executive team. The new CEO inherits the existing team and has to decide quickly who are partners for the next phase, who needs development and who needs to move on. That assessment happens in the first hundred days, through one-to-ones, observation of executive meetings and conversations with the board about each member. Good onboarding gives the CEO the time and information to make those calls carefully rather than reactively. It is also common for a new CEO to want to strengthen the finance or operations seat within the first year, so the board should expect that conversation.

Communication with staff and stakeholders. Customers, employees, shareholders, lenders and key partners are all watching the first hundred days for signals about what will change. The first announcements, the first all-staff sessions, the first board meeting and the first investor update set the tone for the year. Plan them deliberately rather than assuming they will take care of themselves.

Boards that invest in onboarding usually see the new CEO settle faster, the executive team align sooner and the priorities behind the appointment move forward earlier. Boards that treat onboarding as the new CEO’s problem once they have started often see the opposite.

Common pitfalls in CEO searches

Six patterns come up repeatedly in CEO searches that go off track. Each can be avoided with deliberate planning at the start.

• Starting too late. The most common failure. Without a succession plan, boards end up running compressed searches under pressure, which hurts both candidate quality and the rigour of the assessment.
• An unclear role specification. Specifications that drift during the search, gaining and losing criteria, tell candidates the board has not done the work, and the best people withdraw. Agree the specification before the search opens.
• Leaving the chair–CEO relationship to define itself. The most consistent source of first-year friction. Address it explicitly during the offer stage rather than discovering problems in the first ninety days.
• A package anchored on history rather than the market. Using the previous CEO’s package as the reference point often means the strongest candidates decline. Benchmark against the market you are actually hiring from.
• Looking for a copy of the predecessor. The company’s situation has changed, so the same background, style and track record is rarely the right answer. Specify what the business needs next, not what the last CEO did well.
• Treating onboarding as the candidate’s problem. The first hundred days decide whether the appointment works. Plan them as carefully as the search itself.

How Exec Capital approaches CEO searches

Exec Capital runs CEO searches as combined commercial and governance work. The search itself, meaning market mapping, candidate identification, engagement and shortlisting, runs alongside the structural work the board needs to do: the role specification, the chair–CEO relationship, the package envelope and the onboarding plan. We work on a retained basis for CEO mandates, and our involvement runs through to the candidate’s first day rather than ending at offer acceptance.

Our CEO practice covers UK owner-managed and PE-backed businesses, scale-ups, mid-market companies and corporate subsidiaries, on permanent, interim and fractional terms. Where the appointment is into an FCA-regulated firm, we build the SMF1 approval requirements into the brief and the timeline from the start. Where the business operates in a sector with its own governance framework, such as healthcare, education or energy, we build that into the search as well.

Every search is run by our specialist team, with Adrian Lawrence FCA overseeing each mandate. For boards starting CEO succession, or reviewing how previous searches went, we offer an initial conversation covering the role specification, the likely candidate pool and a realistic timeline before any mandate is agreed. There is no commitment, and many boards use it simply to test their thinking. You can read more about how we run CEO search for UK boards on our service page.

Frequently asked questions

How long does it take to hire a CEO?

A permanent CEO appointment commonly takes five to seven months from the decision to start the search to the new CEO’s first day, with the candidate’s notice period often the largest single element. An interim CEO can usually be in post much faster.

Should we use a search firm for a CEO appointment?

For most companies, yes. The strongest CEO candidates are rarely on the market, and reaching them discreetly, assessing them properly and managing the negotiation is specialist work. A retained search firm also protects confidentiality, which matters when the current CEO is still in post.

Who should be involved in choosing the CEO?

The chair usually leads, supported by the nomination committee in a listed company or a small board group elsewhere. Major shareholders, investor directors or the PE sponsor should be involved from the brief stage, since they will need to support the final decision and the package.

Should we consider internal candidates?

Yes, and seriously. Internal candidates should be assessed against external comparators using the same criteria, rather than being treated as an automatic choice or a fallback. A good succession plan identifies and develops them well before a vacancy arises.

When does a CEO appointment need regulatory approval?

At an FCA-regulated firm the CEO normally holds the SMF1 Chief Executive function, which needs FCA (or PRA) approval before the person starts. The offer should be conditional on that approval, and the timeline should allow for it.

Is an interim CEO a good idea while we search?

Often it is. An interim CEO keeps the business moving, takes pressure off the board and stops the permanent search being rushed. It can also give the board a clearer picture of what the permanent role needs to be.