Insights — Executive Recruitment — 4 min read
What Should You Look for When Recruiting a Managing Director?
A strong CV predicts almost nothing about whether someone can run your business well. These are the things that actually do.
In short
Look for demonstrated judgement under ambiguity, the ability to delegate genuinely rather than just distribute tasks, financial fluency sufficient to run the business without leaning on someone else for every number, evidence of building functional leadership teams rather than doing the work personally, and a working style that fits how the founder or board actually wants to be involved. Sector knowledge is useful but rarely decisive on its own.
Most Managing Director appointments are assessed on the wrong evidence: sector experience, company size on the CV, and how well the candidate performs in a single formal interview. None of those reliably predict whether someone can actually run your business — a very different question from whether they have run a similar-sounding one.
What predicts success is a smaller set of specific capabilities and behaviours, most of which only show up if you deliberately look for them during the process, because they rarely appear on a CV.
Why sector experience is overrated as a filter
Sector knowledge shortens the learning curve, and that has real value. It is not, on its own, a reliable predictor of whether someone can run a business well — plenty of experienced sector operators have never actually run anything, having spent their careers as strong functional leaders reporting to someone else. The capability to hold overall accountability is different in kind from deep sector fluency, and the two are frequently confused at shortlisting stage.
The capabilities worth testing deliberately
- Judgement under ambiguity — how they have made decisions with incomplete information, and how they reasoned through them, not just the outcome
- Genuine delegation — whether they built teams that could act without them, or simply worked harder than everyone else personally
- Financial fluency — comfort reading a P&L, cash flow and balance sheet well enough to run the business, even where they are not the finance expert
- Commercial pragmatism — the ability to prioritise ruthlessly among competing demands, rather than trying to fix everything at once
- Communication under pressure — how they have handled a genuinely difficult conversation with a team, a board, a customer or a lender
Questions that surface these, and questions that do not
| Weak question | Stronger alternative |
|---|---|
| Tell me about your leadership style | Describe a specific decision you made with incomplete information, and how it turned out |
| How many people have you managed? | Describe someone you promoted, or removed, and what you learned from getting that call right or wrong |
| Are you comfortable with numbers? | Walk me through how you would review this business's management accounts in your first month |
| What is your management philosophy? | Tell me about the hardest conversation you had to have with your board or your team in the last two years |
Fit with the founder or board matters as much as capability
A highly capable Managing Director who cannot work with how a particular founder wants to be involved will fail regardless of skill. Some founders want detailed weekly visibility; others want to be left alone between board meetings. Establish this explicitly during the process rather than assuming compatibility, and ask the candidate directly how much day-to-day contact they expect and want with the founder or chair.
The best Managing Director for one business can be the wrong one for a business of identical size and sector, purely because of how the founder wants to be involved.
What good reference checking actually looks like
Generic references — 'would you rehire them' — rarely surface anything useful. Ask referees for specific examples: a decision the candidate got wrong and how they handled the fallout, how they behaved under real pressure, and whether the team they built could function without them. Speak to people who reported to the candidate, not only to people the candidate reported to — the two groups often describe a genuinely different person.
- Ask for a specific example of a decision that did not work out, not a hypothetical strength or weakness
- Speak to at least one person who reported to the candidate directly
- Ask what the team was like six months after the candidate left, not just while they were there
- Probe financial judgement specifically — this is the area references are most likely to gloss over
What a strong candidate will ask you
Assessment runs both ways. A strong candidate will ask precise questions about the mandate: what decision-making authority they will actually hold, what the founder or board intends to stop and start doing, and what specifically has to be different in the business in twelve months. A candidate who accepts a vague brief without pushing back on it is often a weaker signal than one who challenges it constructively.
Assessment through the engagement model
For a permanent appointment, weight the process toward long-term fit, values and delegation ability, since the relationship is intended to last years. For an interim appointment, weight it toward speed of judgement and stabilisation experience — the priority is competence from week one, not long-term cultural fit.
Recruiting a permanent executive?
Long-term ownership of a defined executive remit, recruited against what the appointment has to deliver rather than against a job title.
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