Few leadership discussions create more tension than the question of whether a founder should remain CEO as an organisation grows.
The conversation is often framed as though there are only two possible outcomes. Either the founder remains in the role indefinitely or an external executive is eventually brought in to replace them.
In reality, the situation is usually more nuanced than that.
Some founder CEOs continue leading successfully through multiple stages of growth. Others choose to transition into another role. Many build capability around themselves that allows them to continue contributing where they create the greatest value while different people take responsibility for other parts of the organisation.
The more useful question is not whether founders make good CEOs.
The question is whether the leadership capability required for the next stage is already present within the organisation.
That capability may sit with the founder. It may sit with people around them. It may need to be introduced from outside.
What matters is understanding what the organisation is asking of the role.
In early-stage biotech and medtech companies, founders often carry an extraordinary range of responsibilities. They are simultaneously responsible for strategy, investment, scientific direction, partnerships, culture, stakeholder engagement and organisational leadership. They are often the individual with the deepest understanding of the technology, the origin of the vision and many of the relationships that have helped the company reach its current position.
During this stage, the breadth of the role can be an advantage. The organisation benefits from direct access to someone capable of connecting strategic, scientific and commercial decisions.
As the organisation grows, however, the nature of the work often changes.
Commercialisation creates new requirements. Regulatory complexity increases. Teams grow. Investors become more involved. Governance structures mature. The volume and speed of decisions expand significantly.
The question becomes whether the current leadership model still allows the organisation to perform effectively.
This is where Boards sometimes make the mistake of focusing almost entirely on the individual rather than the capability.
They ask whether the founder is the right CEO.
A more revealing question is often whether the organisation has the leadership capability required for what comes next and where that capability currently sits.
Consider a founder leading a company through successful clinical development. The next stage may involve commercialisation across multiple markets, organisational scaling and a larger executive team. The founder may be entirely capable of continuing as CEO, but the organisation may still require additional leadership around them.
Perhaps commercial capability needs to be strengthened.
Perhaps operational leadership needs to sit with a more experienced executive.
Perhaps governance needs to evolve.
The answer may not involve replacing the founder at all.
It may involve changing the leadership system around them.
This distinction is important because many successful transitions involve redistributing capability before redistributing titles.
The strongest Boards often begin by examining where decisions currently sit, where pressure is emerging and which future requirements are likely to challenge the existing structure.
A practical way of doing this is to separate the organisation’s future requirements into three areas.
The first is strategic leadership. Who will shape the future direction of the organisation?
The second is organisational leadership. Who will build and lead the teams required to deliver that strategy?
The third is execution leadership. Who will ensure the work actually gets done?
In some organisations, one individual continues carrying all three responsibilities.
In others, the distribution changes as complexity increases.
Neither model is inherently right or wrong.
The important consideration is whether the way leadership is currently structured reflects the work ahead rather than the work that existed previously.
Another helpful question is whether the organisation has reached a point where new capability would create value even if the founder remains CEO.
This often shifts the conversation productively.
Instead of asking whether someone should stay or go, the organisation begins exploring what expertise is missing, what decisions need additional support and which capabilities will be required over the next three to five years.
The discussion becomes less personal and more organisational.
It becomes less about succession and more about readiness.
Sometimes that process reveals that the founder remains the ideal person for the role.
Sometimes it reveals capability gaps that should be addressed around them.
Sometimes it indicates that a future transition would strengthen the organisation.
The answer is different in every situation.
What tends to be consistent is that the strongest outcomes emerge when Boards separate the individual’s contribution from the organisation’s future capability requirements.
Because ultimately, the objective is not deciding whether a founder should remain CEO.
The objective is ensuring the organisation has the leadership capability required for what comes next.
The title is only one part of that discussion.
Start with the capability required for the next stage
Whether you are considering leadership succession, strengthening the executive team or building capability around a founder-led organisation, the first discussion is often about what the organisation will require in the future rather than who currently holds the title.
About Hunton Executive
Executive search, strategic headhunting, and specialist recruitment for healthcare and life sciences organisations. From Board appointments and executive leadership to the specialist capability around them. Permanent, interim and fractional.