Interim or permanent: a governance decision, not a stopgap

When an executive or director leaves, the first question at the table is almost always a practical one: who takes over the work until there is a successor? An interim appointment is then the obvious answer. It brings calm, keeps business moving and buys the organisation time. Whether that time is used well is a different question, and it is asked less often.

In an assignment we have written about before, the task was to succeed the managing director of a manufacturer in a seaport area. The departure was foreseeable and the company was technically in good shape. Yet the succession conversation only started when the decision should already have been made. What followed was an interim arrangement that lasted far longer than intended, and a new director who started with a backlog he had not created himself.

The gap on paper and the question underneath

An interim request is rarely about capacity. On paper it is a gap: someone has left and work is piling up. In conversation it usually turns out to be something else — a reorganisation that will not get off the ground, a succession that has stalled, a team that has lost its confidence. Treat it as a capacity question and you get a capacity solution, and a year later you are back where you started.

The distinction matters for the choice between interim and permanent. If the task is clear and only the person is missing, a permanent appointment is usually preferable, even if it takes longer. If the task itself is not yet sharp, because strategy is shifting or the organisation first needs to be set straight, an interim executive can create exactly the room needed to define the profile of the permanent successor.

The test: is the interim working towards being unnecessary?

The best interim executive works towards their own redundancy. It sounds like a slogan, but it is a testable criterion. Ask an interim candidate what should be different in nine months and listen to whether the answer is about the organisation or about themselves. Those who describe which decisions others will then be taking have understood the assignment. Those who describe which files they will have closed are an expensive resource.

It also follows what an interim assignment needs: a defined mandate, an end date that is taken seriously and an agreement on what must be in place at handover. Without those, a temporary solution quietly becomes a permanent one.

What the governance code asks of the board

For listed companies, the responsibility is clearly set out. Under best practice provision 2.2.4 of the Dutch Corporate Governance Code, the supervisory board ensures that the company has a sound plan for the succession of executive and supervisory directors, aimed at retaining the balance of expertise, experience and diversity. Provision 2.2.3 also requires a press release stating the reason when an executive director steps down early. The updated code was designated in law earlier this year.

For unlisted companies, family businesses and public-sector organisations the code does not apply directly, but its logic does. A board with a succession plan can use an interim appointment as a deliberate step. A board without one uses the interim executive as a substitute for a decision that still has to be made. At its core, then, the choice between interim and permanent is a supervisory question, not a personnel one.

The view from the other side of the table

For candidates the situation deserves just as much attention. Anyone approached for a permanent role after a long interim period joins an organisation where decisions have been taken, or not, for months. So ask what the interim executive decided, what was deliberately left for the successor, and whether the supervisory board stands behind those choices. A clear handover is a good sign. A vague one signals that the first hundred days will be heavier than the job description suggests.

If you are asked to serve as an interim executive yourself, the reverse applies. Ask about the mandate and the end date before you start, and ask who will be taking the decisions after you. A client who cannot answer that may not be looking for an interim executive, but for a delay.

In closing: the question behind the question

That brings us to a word about our own role. Loyalty to a client does not mean we always agree with them. The hardest conversations we have are the ones in which we say the question has been framed wrongly. That sometimes costs us an assignment. It almost always leads to a longer relationship.