The senior management handover process can either mitigate or exacerbate any type of crisis in the government sector. Whether due to internal or external causes, or both, a crisis is a tremendous challenge to promote a seamless and stable process of leadership transfer. Research on private sector leadership transfers shows that a lack of formal processes and procedures can lead to costly setbacks and needlessly long periods of transition (Gabarro, 2007). Within the public sector, and particularly within specific institutions like central banks, leadership transitions can have lingering, lasting, and meaningful effects on the geopolitical landscape and the global economy. An effective handover process begins with strategic planning. Change management needs to be proactive rather than reactive, going beyond merely anticipating threats and actually building into the organizational structure the means by which to change and adapt (“Why Change?” 2005). To construct a proactive change management strategy, the organization needs to refer first to its mission, vision, and guiding principles. The values upon which the organization was founded, and to which it ascribes, will help determining the purpose and vision for the intended leadership change. Moreover, the change will be driven by principles and values, allowing for the selection of leaders that can better align practices, policies, and organizational culture with mission and vision. Central banks frequently...
During the handover process, senior management needs to make decisions that concur with the financial institution’s obligations to stakeholders, and not just investors.References
Brennan, J. (2018). Leadership improvement needed in Central Bank, governor tells staff. The Irish Times, April 7, 2018. https://www.irishtimes.com/business/economy/leadership-improvement-needed-in-central-bank-governor-tells-staff-1.3396548
“Central banking leadership flux looms as global economy facing combustible challenges,” (2017). Financial Post. 18 Oct, 2017. http://business.financialpost.com/news/economy/corrected-rpt-as-the-quartet-breaks-up-central-banking-leadership-flux-looms
Gabarro, J.J. (2007). When a new manager takes charge. Harvard Business Review. https://hbr.org/2007/01/when-a-new-manager-takes-charge
Mishkin, F.S. (1998). Central banking in a democratic society. Columbia University. https://www0.gsb.columbia.edu/faculty/fmishkin/PDFpapers/DEMOCRAT98Z.pdf
“Why Change?” (2005). MendHurst. http://www.mendhurst.com/central-banking/why-change/
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