Reference no: EM133362096

Question:

LK Corporation's chief executive officer (CEO) resigned on February 2, 2023, creating the need to select a new CEO. The Board of Directors immediately formed a search committee consisting of department heads from Accounting, Information Systems, Marketing, Operations and Personnel. The Board also contracted with a recruiting firm for the purpose of identifying candidates for the CEO position. The Board developed a preliminary job description and submitted it to the search committee for their review. After making a few modifications to the job description, the search committee chair returned it to the Board, who passed it along to the recruitment firm.

The recruitment firm advertised the position and collected appropriate documentation (resume, letters of references, college transcripts, and application letters) from candidates; they examined each applicant's materials to determine which candidates met the basic job requirements. Candidates who did not meet the basic requirements received a letter thanking them for their application; their materials were scanned and filed in an electronic database at the recruiter.

For candidates who met the basic requirements, the recruitment firm passed a copy on to LK's search committee and scanned and filed the original documentation. Two or three members of the search committee conducted informal phone interviews with each of the candidates and narrowed the list down to ten people for reference checking and preliminary formal interviews. The recruitment firm wrote the non-selected candidates thanking them for their application. Preliminary formal interviews were conducted over a two-week period by the whole search committee with each of the ten candidates via Zoom. Based on the preliminary interviews, and in consultation with the recruitment firm's reference checking reports, the search committee narrowed the list down to five people. These five were invited to LK's offices for two days (each) of interviewing. LK's human resources division made all the travel arrangements for the finalists and LK's accounts payable division paid the airfare and hotel bills for each finalist directly with the appropriate vendors.

From the on-site interviews, the search committee selected three names to forward to the Board, who made the final selection and negotiated the offer. If an agreement was not reached with their first candidate, the Board moved onto the next candidate. It was not anticipated that they would not be able to reach an agreement with one of the three candidates. Once an offer was accepted, thank you letters were sent by the recruitment firm to the other non-selected candidates and the recruitment firm presented their invoice to LK's accounts payable division.