When a CEO announces his/her transition or retirement, the organization’s board has several issues to consider. Among those issues, and probably the most obvious, is recruiting and hiring a replacement. Often other members of the leadership team and long-time employees throw their hats into the ring for consideration. While it speaks well of the organization that current employees want to take the lead, and many are qualified to do so, their interest can pose some challenges for the board and the search committee.

A well-organized and transparent hiring process is the most effective way to ensure a positive result, but not everything in this process is black and white. Following are tips to navigate potential internal candidate recruitment traps.

Review the job description and qualifications.

First and foremost, make sure your board is in agreement on the future of the organization, what skills the new leader needs to possess, and that you have a clear position description. Many organizations haven’t looked at the ED or CEO position description in any real way since the last time they made a hire–which might have been 10 years ago. If your organization has grown or changed at all it’s likely your job description is out-of-date. A clear position description will allow potential internal candidates to better assess their interest and readiness for the job, and provide the search committee with a foundational tool to compare candidates fairly.

Put together a strong search committee.

What constitutes a strong committee? That’s up to your organization and your board chair, but often it’s made up of a subset of board members and other stakeholders (donors, consultants etc.). The chair of this committee must have both the respect of the other board members and the time to manage the process. Typically, the hiring committee for the top job does not include employees. Resist the temptation to have the incumbent join this committee. The current CEO might have the best intentions, but she can’t really assess candidates–especially internal ones– in an unbiased way.

Decide how you will handle internal candidate applicants.

Deciding if and how you consider internal candidates can be tricky and these conversations can be very uncomfortable, but be sure to have them with your search committee before you launch the search.  Deciding on the fly or on a case-by-case basis can backfire, negatively impacting staff morale and derailing even the most well-organized and well-intentioned search process. Things to consider: Does every internal candidate get an interview with the search committee regardless of qualifications? Will all qualified internal candidates automatically become finalists? If the internal candidate isn’t qualified (see your job description), is it better or worse to waste their time and the time of the committee if it’s not likely he or she will be hired? Or is there some honor in just being considered? Consider your culture when answering these questions. Be respectful and be sure to honor the tenure of the candidates, but also be realistic.

If there is an obvious internal successor, consider hiring an objective third-party consultant to assess the qualifications of this candidate before making the hire—be sure to manage expectations along the way.  A good internal candidate won’t be offended if you ask her to interview for the job, particularly if that expectation is set up front and the message is delivered respectfully. Organizations that just appoint the next leader and make the hire without external validation of the choice often struggle with buy-in from staff, board members and other leaders. If your organization doesn’t have the funds to hire an external consultant to help, ask your board for recommendations. Sometimes HR professionals will do this assessment work pro bono—particularly if they already have a relationship with your organization.

Set clear ground rules for the board and search committee regarding communication about the search.

Nothing derails a good process more quickly than search committee members sharing information with candidates outside the process. I once led a search for an organization that had several internal candidates apply for the CEO role. Many search committee members had relationships with the candidates. One search committee member unwittingly told his friend (who was a candidate) that she was no longer being considered for the top job before she had been notified by the search committee chair. The internal candidate was devastated and embarrassed.  Make sure your search committee members understand why they need to commit to not sharing information outside the process.

Treat every candidate the same way regardless of whether internal or external.

Aside from keeping things legal, this also keeps your organization from being accused of favoritism or impropriety. Once you decide which internal candidates you will interview and why, make sure you treat all candidates the same way. If you ask your external candidates to present, make sure you have your internal candidates present. If you ask your external candidates to interview with the consultant, make sure your internal candidates do too. Ask all candidates the same questions.

Do not include internal candidates on the search committee.

In a well-intentioned effort to be inclusive and get buy in, organizations sometimes allow internal candidates to participate in interviews with external candidates. Not only is this unfair to the external candidates, it also gives your internal candidate an advantage. Even the most objective candidates can’t assess the competition fairly. If your CFO wants to be considered for your open CEO role then that means your CFO should recuse himself from any interviews with staff and trust that his board will make the best choice.

Navigating transition when there are internal candidates can be tricky for even the most experienced board or search committee, but these six tips can help you successfully sail through even the most challenging dynamics.

You can also view this post at nonprofitmaine.org. The Smart Group Executive Search is the preferred executive search partner for Maine Association of Nonprofits.