This chapter focuses on how you shape the “human system” of the company: the culture people feel every day, the talent you attract and grow, and the way the organization is structured to deliver the strategy. Boards increasingly see culture and people as core to value creation—not a soft topic on the side—and they expect CEOs to be deliberate architects of both. The skills in this chapter assess whether you can define the culture you want, behave in ways that are fully consistent with it, and hard-wire it into talent, performance, and organizational decisions. In short, this chapter helps you test whether you are already leading as the chief culture officer, not just the chief strategist or operator.
5.1 Defining, role-modeling, and reinforcing the desired culture
What the Board is looking for
When Boards evaluate a candidate’s ability to define, role-model, and reinforce the desired culture, they are looking for evidence that culture has been treated as a strategic asset, not a slogan. They want to see that the candidate has articulated a small set of clear cultural expectations linked to the company’s strategy, and then lived those expectations visibly and consistently. They also look for proof that the candidate has embedded culture into concrete mechanisms—hiring, promotions, rewards, consequences, and rituals—so that it endures beyond campaigns or posters. Ultimately, they want someone whose behavior, and whose decisions about others’ behavior, reliably signal “this is how we do things here.”
Open-ended question
“Describe how you have defined and then shaped the culture of a business or organization you have led—what specific behaviors you wanted to see more or less of, what you personally did to role-model those behaviors, what mechanisms you changed (e.g., hiring, promotions, recognition, consequences), and what evidence you have that the culture actually shifted over time.”
Rubric – 5.1 Defining, role-modeling, and reinforcing the desired culture
Nascent
- Has not yet taken primary responsibility for defining or shaping culture at a business or enterprise level.
- Culture in prior roles was largely inherited; any articulation of values or behaviors remained generic and rarely referenced in decisions.
- Few examples where they took visible action—positive or corrective—based explicitly on cultural expectations.
- Feedback suggests that people primarily experienced culture as “how things already are,” not as something the leader was actively shaping.
Developing
- Has contributed to defining or refreshing cultural values or behaviors, usually as part of a broader leadership team effort.
- Can point to some instances where they explicitly role-modeled or highlighted desired behaviors (e.g., recognition, stories, symbols).
- Has made a limited number of people or process decisions (hiring, promotion, or consequences) that were clearly tied to cultural fit or behavior.
- Early signs of culture change are visible in pockets, but shifts are uneven and not yet sustained across the broader organization.
CEO-Ready
- Has led a deliberate effort to define or sharpen the desired culture for a business or large organization, linked to strategy and context.
- Can demonstrate multiple, concrete examples where their own behavior under pressure clearly reflected the stated cultural expectations.
- Has embedded culture into core people processes—selection, promotion, performance, rewards, and consequences—with visible impact on who advances.
- Employee feedback, engagement data, or other indicators show a sustained shift in behaviors and norms over several years under their leadership.
Distinctive
- Has driven a significant cultural transformation that is widely recognized inside the organization as a “before and after” shift.
- Can point to tough, high-profile decisions (e.g., removing senior leaders, walking away from business, taking a public stance) that powerfully reinforced the desired culture.
- The culture they helped build is now self-reinforcing—new leaders and employees quickly absorb “how we do things,” and it persists beyond their direct involvement.
- Across roles or companies, is regarded as a leader whose cultural impact is as defining as their financial or strategic achievements.
5.2 Talent and succession strategy for critical roles (including CEO)
What the Board is looking for
When Boards evaluate a candidate’s talent and succession strategy for critical roles (including CEO), they are looking for evidence that this person takes a proactive, long-term view of leadership needs. They want to see that the candidate has identified which roles are truly critical, built robust succession pipelines for them, and regularly engaged in honest talent reviews with concrete follow-ups. They also look for proof that the candidate has worked with the Board (where relevant) on CEO and top-team succession in a thoughtful, ongoing way—not just in a crisis. Ultimately, they want someone who leaves behind a stronger, more future-ready leadership bench than the one they inherited.
Open-ended question
“Walk us through how you have approached talent and succession for the most critical roles in your organization—including, where relevant, CEO succession: how you identified critical roles, how you assessed and developed successors, what specific moves or plans you put in place, and what evidence you have that your bench is stronger and more resilient as a result.”
Rubric – 5.2 Talent and succession strategy for critical roles (including CEO)
Nascent
- Has not yet taken primary responsibility for succession planning beyond providing input to HR-driven processes.
- Critical roles in their area of responsibility were not explicitly mapped, with limited clarity on who could step in if a leader left.
- Succession discussions, where they occurred, were largely name lists with little follow-up on development or readiness.
- Few examples where an unexpected vacancy in a key role was smoothly filled by a prepared internal successor.
Developing
- Has participated in or led some talent and succession discussions for a function, business unit, or region.
- Can point to several critical roles with identified successors, though readiness levels and development plans may be uneven or informal.
- Has supported or initiated some targeted development moves (e.g., rotations, stretch roles) for potential successors.
- When vacancies occurred in key roles, internal candidates were sometimes ready, but external hires or interim solutions were still frequently needed.
CEO-Ready
- Has led a structured talent and succession process for critical roles across a sizable business or enterprise, revisited regularly.
- Can demonstrate multiple cases where planned internal successors successfully stepped into critical roles with minimal disruption.
- Has clear, documented development plans for high-potential leaders, linked to future role needs and reviewed in disciplined talent forums.
- Where relevant, has engaged the Board or top governance body in ongoing CEO and top-team succession discussions, not just one-off events.
Distinctive
- Has built a deep, diverse leadership bench where succession for most critical roles, including CEO-equivalent roles, is robust and multi-layered.
- Can point to a track record of “feeding the system” with leaders who later became CEOs or C-level executives in their organization or elsewhere.
- Talent and succession processes they established are considered best practice and have continued effectively after their departure.
- Across roles or companies, is known for leaving behind organizations that are measurably stronger and more resilient because of their leadership pipeline.
5.3 Building a diverse, equitable, and inclusive leadership pipeline
What the Board is looking for
When Boards evaluate a candidate’s ability to build a diverse, equitable, and inclusive leadership pipeline, they are looking for hard evidence that this has been treated as a business priority, not an HR slogan. They want to see measurable changes over time in the diversity of successors, promotions, and hires for critical roles, as well as concrete actions to remove systemic barriers and improve inclusion. They also look for proof that the candidate has personally sponsored underrepresented talent and held leaders accountable for outcomes, not just intentions. Ultimately, they want someone who can credibly say that the future leadership of the company will better reflect its customers, employees, and communities—and can show the data to back it up.
Open-ended question
“Tell us about how you have strengthened diversity, equity, and inclusion in your leadership pipeline—what specific diagnostics you did, what changes you made to talent processes and your own behavior, what results you saw in the composition and experience of leaders over time, and where you still see gaps.”
Rubric – 5.3 Building a diverse, equitable, and inclusive leadership pipeline
Nascent
- Has not yet taken primary ownership for DEI outcomes in leadership pipelines; efforts have largely been led by HR or corporate programs.
- Can point to attendance at DEI training or support for initiatives, but with few concrete changes in leadership processes or outcomes.
- Little or no tracking of diversity or equity metrics in succession plans, promotion slates, or critical role appointments under their remit.
- Leadership teams and successor lists in their area have remained demographically similar over time, with no clear shift toward greater diversity.
Developing
- Has begun to review leadership and succession data by demographic group and to discuss representation and equity with HR and their team.
- Can point to some targeted actions (e.g., diverse slates, adjustments to job criteria, sponsorship of a few underrepresented leaders) with early results.
- Has made limited but visible changes to processes such as hiring panels, promotion discussions, or development opportunities to reduce bias.
- Representation in some parts of the leadership pipeline has improved modestly, though progress is uneven and not yet systematic.
CEO-Ready
- Has led a structured effort to build a more diverse, equitable, and inclusive leadership pipeline for a sizable business or enterprise.
- Can demonstrate clear, multi-year improvements in representation and progression of underrepresented groups at key leadership levels and in succession plans.
- Has embedded DEI considerations into core talent processes—search, selection, performance, promotion, and development—with regular review of disaggregated data.
- Is recognized by HR and senior leaders as someone who personally sponsors diverse talent and holds others accountable for inclusive leadership behaviors and outcomes.
Distinctive
- Has driven a step-change shift in the diversity and inclusiveness of the leadership pipeline that is widely acknowledged inside the organization.
- Can point to sustained improvements across multiple cohorts and levels, with underrepresented leaders moving into critical roles at materially higher rates.
- Has helped redesign enterprise-wide talent and leadership systems to hard-wire equity and inclusion, influencing practices beyond their own area.
- Across roles or companies, is known for creating environments where diverse leaders thrive and for leaving behind leadership benches that better reflect the markets and societies the organization serves.
5.4 Designing organization structure and operating model to enable strategy
What the Board is looking for
When Boards evaluate a candidate’s ability to design organization structure and operating model to enable strategy, they are looking for evidence that this person can translate strategic intent into how the company is actually organized and run. They want to see that the candidate has led real changes to structures, spans and layers, governance, and ways of working in order to better serve customers, markets, or strategic priorities. They also look for proof that these designs have improved clarity, decision speed, collaboration, and performance—not just produced org charts. Ultimately, they want someone who can architect an operating model that makes the strategy executable at scale.
Open-ended question
“Describe a time when you redesigned the organization structure and/or operating model of a business to better support its strategy—what strategic problems you were trying to solve, what specific changes you made (structure, governance, processes, decision rights), how you implemented them, and what impact they had on performance and behavior over time.”
Rubric – 5.4 Designing organization structure and operating model to enable strategy
Nascent
- Has not yet had primary responsibility for designing or redesigning an organization structure or operating model at business or enterprise level.
- Prior structures under their remit largely evolved incrementally, with changes focused on adding roles or shifting reporting lines.
- Can point to a few examples where strategic issues (e.g., customer focus, innovation, efficiency) led to deliberate operating model changes.
- Persistent pain points such as unclear ownership, slow decisions, or siloed behavior remained unaddressed structurally.
Developing
- Has led or co-led some structural changes (e.g., team reorganizations, new units, reporting line shifts) to address specific issues.
- Can describe at least one initiative where they aligned parts of the organization more closely with products, customers, or regions.
- Operating model changes have focused mainly on org charts, with limited adjustment to decision rights, processes, or forums.
- Outcomes show some localized improvement, but broader issues of coordination, speed, or accountability persisted or reappeared.
CEO-Ready
- Has led a significant redesign of organization structure and operating model for a sizable business or enterprise, explicitly tied to strategy.
- Can demonstrate specific changes across structure, decision rights, governance forums, and ways of working that improved execution.
- Measurable outcomes include clearer accountability, faster decision-making, better cross-functional collaboration, and improved performance.
- New operating model remained stable and effective over multiple cycles, with only targeted refinements rather than constant reorganization.
Distinctive
- Has repeatedly architected operating models that unlocked step-change performance—e.g., faster innovation, stronger customer orientation, or major efficiency gains.
- Can point to restructurings or operating model shifts that materially repositioned the business (e.g., from product-centric to customer-centric, from local to global/regional matrix).
- Their designs have become reference points or templates used in other parts of the company or in later roles.
- Across organizations, is recognized as an exceptional enterprise designer who can “hard-wire” strategy into structure, governance, and ways of working with enduring impact.
5.5 Setting performance management and reward philosophies that drive behavior
What the Board is looking for
When Boards evaluate a candidate’s ability to set performance management and reward philosophies that drive behavior, they are looking for evidence that this person understands that “what you measure and pay for” is one of the most powerful levers a CEO has. They want to see that the candidate has reshaped goals, scorecards, incentives, and recognition practices so that they reinforce the strategy, desired culture, and time horizon—not just last year’s budget. They also look for proof that these systems have actually changed behavior and outcomes, rather than being treated as administrative or HR processes. Ultimately, they want someone who can align performance and rewards in ways that are fair, motivating, and clearly linked to long-term value creation.
Open-ended question
“Describe how you have shaped or reshaped performance management and rewards in your organization—what you chose to measure, how you linked rewards to those measures, what changes you made to incentives or recognition, and what evidence you have that these changes shifted behavior and improved outcomes.”
Rubric – 5.5 Setting performance management and reward philosophies that drive behavior
Nascent
- Has mostly operated within existing performance and reward systems, with limited influence over their design or philosophy.
- Objectives and KPIs for their teams largely mirrored legacy metrics or budget lines, without clear linkage to strategy or culture.
- Compensation, bonuses, and recognition under their remit were handled as routine processes rather than deliberate levers of behavior.
- Few examples where they challenged misaligned incentives or changed targets to better support long-term goals.
Developing
- Has made some adjustments to goals, KPIs, or bonus criteria for their area to better reflect strategic priorities.
- Can point to at least one instance where changing metrics or incentive design led to behavior shifts in a team or business unit.
- Has experimented with non-financial recognition or revised performance dialogues, though changes are still somewhat localized or ad hoc.
- Shows growing awareness of unintended consequences of metrics and rewards, but not yet a fully articulated, enterprise-wide philosophy.
CEO-Ready
- Has led a structured redesign of performance management and/or reward systems for a substantial business or enterprise.
- Can demonstrate clear before-and-after examples where new goals, KPIs, and incentives drove different, strategically aligned behaviors and results.
- Has balanced financial, strategic, and cultural metrics (e.g., customer, innovation, people, ESG) and embedded them into scorecards and rewards.
- Is recognized by HR and senior leaders as someone who treats performance and pay as strategic tools, not just processes, and who actively manages trade-offs (short vs. long term, individual vs. team, financial vs. non-financial).
Distinctive
- Has driven a step-change shift in how performance and rewards work, resulting in sustained improvements in execution, collaboration, and long-term value creation.
- Can point to major strategic or cultural pivots that were enabled or reinforced by bold changes in performance metrics and incentive design.
- The performance and reward philosophy they implemented is referenced as a model or has been replicated in other parts of the organization or in later roles.
- Across organizations, it is known for creating systems where people clearly understand what matters, see a fair link between contribution and recognition, and consistently behave in ways that advance the strategy.
