By Maxwell Salazar, Salazar Leadership Advisory — Maxwell Salazar is a business psychologist who helps private equity firms make better leadership bets. He evaluates C-suite leaders, surfaces culture and execution risk, and gives investors the clarity to hire, align, and support the people who drive value creation
As an organizational psychologist who assesses executives for private equity investors, I see a governance gap that boards overlook every single quarter. A board finds a new COO hire with consensus. The candidate comes out of a premium search firm with eighteen years of industry experience and excellent recommendations. Everything seems correct. The financials are in line, and the strategic goal is definite. Twelve months later, he is out.
The disconnect is simple: the board knew every detail of the financials, but nobody on that board actually knew the leader. They approved a résumé, not a leadership profile. It is a governance blind spot boards keep repeating, and it is time directors stopped treating it as a cost of doing business.
What Boards Are Actually Approving
Approving a Pedigree, Not a Profile
Most boards review a candidate summary, a compensation proposal, and a reference check. They rarely review any meaningful behavioral data about how a leader operates under pressure, essentially approving a pedigree rather than a profile.
The Failure Modes Nobody Sees
Key failure modes—defensiveness, rigidity, and an inability to scale—never appear in a standard recruiting package.
The Governance Blind Spot
Boards often rely on the General Partner’s gut read or the search firm’s endorsement. Neither source provides an independent assessment of how the executive is likely to behave under pressure once hired. If you rely on a General Partner’s gut, you are often relying on a judgment formed in a brief lunch or a structured but superficial interview. No board would ever approve a financial model containing this many unknowns, yet they approve people with almost no data.
The standard approach to hiring creates a massive blind spot. We spend months vetting the numbers, but treat the person running the numbers as an afterthought. It is a classic governance failure. Boards are trained to audit financial reports for errors, yet they fail to apply the same skepticism to a human being.
When you hire someone based on a clean résumé, you are gambling that the environment they came from will be exactly like the one they are entering. You are hoping that their past successes were due to their own skill rather than favorable market conditions. You are choosing to ignore the reality that high-pressure environments often expose flaws that remain hidden during a standard interview process.
The Cost of What You Don’t Know
The Hard Costs
The hard costs are quantifiable: search fees, transition costs, missed operational milestones, and board distraction. These figures appear in reports and irritate investors, but they are only half of the story.
The Hidden Cost of Delay
The hidden soft cost is more corrosive. It is the 12-to-18-month period spent rationalizing poor fit before anyone admits the hire is not working, stalling execution and value creation for the entire portfolio company.
When the Wrong Leader Stays Too Long
I remember a CEO who looked ideal on paper. He had the right pedigree, a string of previous successes, and he sounded like he knew the playbook. But once he was in the chair, he could not handle the board’s scrutiny. He took every question about his performance as a personal attack.
He stopped communicating, siloed his team, and refused to adjust his strategy when market dynamics shifted. It took the board nearly fifteen months to move him out, and in that time, the company’s momentum ground to a halt. The value lost in those months far exceeded the cost of a two-week assessment that would have flagged his defensiveness from the start.
This is the reality of hiring without behavioral data. You are not just paying for a search. You are paying for the time it takes to realize that the person you brought in is not the person you needed. That time is the one resource a board can never recover.
Every quarter of stalled execution is a quarter of wasted potential. By the time the board finally decides to pull the plug, the market has moved, competitors have caught up, and the initial value creation plan is effectively dead.
What Better Oversight Looks Like
Add One More Checkpoint
I am not arguing for longer searches or more bureaucracy. I am arguing for one additional checkpoint. Before a board approves a finalist, it should understand where that leader is likely to thrive and where support will be required. Structured assessment does not slow down the hiring timeline. Instead, it adds a critical checkpoint at the finalist stage.
Demand Specificity
What boards need is operational specificity. Move away from generalities. Boards should know exactly where a leader is strong, where they are vulnerable, and what support they will require. If you cannot describe the behavioral risks of your management team, you are not managing risk. You are just hoping that the people you hired stay out of their own way.
Bring Leadership Risk Into the Board Package
Assessment findings should sit alongside compensation recommendations, references, and hiring materials. Boards should review leadership risks with the same discipline applied to financial risks. This shifts assessment from a hiring checkpoint to a practical tool for supporting leaders after the deal.
Governance, Not Gatekeeping
The goal is not to find a perfect executive, as perfect leaders do not exist. Every hire presents some degree of danger. An informed board knowing what they are purchasing is the aim. You don’t let a CEO who is a builder but lacks process discipline derail the hiring. To guarantee their success, you build the framework around them. That is governance. That’s management.
The Question Every Board Should Be Asking
If someone asked you right now to describe the top three risks in your management team’s leadership profiles, could you answer with clarity? If you cannot, that is the gap. It is a major oversight, and it is a risk that boards approve every single quarter without question.
To explore structured leadership assessment for your portfolio companies, connect with Maxwell Salazar’s executive assessment services.
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