CEO Evaluation in a Clinical-Stage Company
Evaluating a CEO against quarterly revenue targets is straightforward. Evaluating one who is managing clinical risk, investor relationships, and a science-driven team — without any product on the market — is something else entirely.
Clinical-stage biopharma is one of the few industries where the CEO can do almost everything right and still produce results that look, on paper, like failure. A trial can miss its primary endpoint for reasons that have nothing to do with leadership quality. A partnership can fall apart because a large pharma company changed its therapeutic focus. A financing round can close late because the macro environment shifted. The board that conflates these outcomes with management failure will eventually fire the wrong person at exactly the wrong moment.
Getting CEO evaluation right in this context is one of the most consequential things a biopharma board can do.
Why Standard Evaluation Frameworks Break Down
Most CEO evaluation frameworks are built around commercial companies. Revenue growth. Margin expansion. Customer retention. EBITDA. These are lagging indicators of execution quality — they tell you what already happened.
In a clinical-stage company, the most important outcomes are years away, probabilistic by nature, and heavily influenced by factors outside anyone's control. If the board waits for commercial outcomes to assess the CEO, they are not evaluating leadership — they are evaluating luck, biology, and timing.
The better question is not "what happened?" but "given what we knew, did the CEO make the right decisions, and did they build the capability to execute when the moment arrives?" That requires a fundamentally different evaluation approach.
The Three Dimensions of Clinical-Stage CEO Performance
I find it useful to organize CEO evaluation around three separate dimensions, each of which requires different evidence and different board judgment.
Scientific and operational execution is the most tractable dimension. Did the CEO hit the milestones they committed to — enrollment targets, data readouts, regulatory filings, manufacturing scale-up? Were delays explained transparently and managed proactively? Does the company have the scientific talent and CRO relationships in place to execute the program? This dimension is measurable, even when outcomes are uncertain. A CEO can miss a data readout through no fault of their own; missing enrollment targets three quarters in a row is a different matter.
Capital stewardship and runway management is often underweighted in evaluation conversations because it feels uncomfortable. But the fundamental job of a clinical-stage CEO includes keeping the company funded and managing burn against milestones. Did they extend runway through non-dilutive funding, strategic partnerships, or disciplined cost management? Did they identify capital needs early and communicate them to the board without surprises? Did they preserve optionality — maintaining relationships with multiple investor classes — rather than becoming dependent on a single funding source?
Organizational and external positioning is the dimension boards most frequently fail to evaluate rigorously because it is the hardest to measure. What is the quality of the senior team the CEO has recruited and retained? Are key scientific advisors still engaged and speaking positively about the program? Is the company building relationships with potential acquirers or partners at the right level and the right pace? Is the CEO credible with the investor community — not universally loved, but respected as someone who delivers what they promise?
Building the Evaluation Process
A rigorous CEO evaluation in a clinical-stage company has several components that most boards shortcut.
Start with agreed-upon goals. The evaluation should not be a surprise. At the beginning of each fiscal year — or after a major strategic reset — the board and CEO should explicitly agree on the goals against which the CEO will be evaluated. These goals should span all three dimensions above: operational milestones, financing targets, and organizational objectives. "We want you to get to Phase 2 data readout" is a milestone; it is not a complete set of goals.
Separate the annual review from the compensation discussion. When performance evaluation and compensation setting happen in the same conversation, the quality of honest feedback collapses. Both the CEO and the board become focused on the number rather than the substance. Best practice is to conduct the formal evaluation first, close it, and then set compensation in a separate meeting informed by — but not conflated with — that evaluation.
Use a structured 360 input process. The full board should contribute to the evaluation, not just the lead independent director or compensation committee chair. Beyond the board, thoughtful input from the CFO, CSO, and one or two key external stakeholders (a major investor, a scientific advisor) can surface things the board cannot see from its vantage point. The CEO should also do a self-assessment — both as input to the conversation and as a diagnostic tool. A CEO with a dramatically different view of their own performance than the board holds is itself important information.
Conduct a candid, private conversation. The board chair or lead independent director should deliver the evaluation directly to the CEO in a one-on-one setting before any broader communication. This is not the place for diplomatic vagueness. The CEO needs to hear clearly what the board values, what concerns it, and what it expects in the year ahead. Many board chairs soften negative feedback to the point of meaninglessness — and then are surprised when nothing changes.
The Hard Case: When Trial Results Disappoint
The evaluation becomes genuinely hard when the clinical program fails to produce the hoped-for result. This is the moment when conflating outcome quality with decision quality is most tempting — and most dangerous.
The board's job in this situation is to ask two separate questions.
First: given what was known at the time decisions were made, were those decisions reasonable? Was the dose selection defensible? Was the patient population appropriate? Were the regulatory interactions handled well? Was the data monitoring committee process sound? These are questions about decision quality, and they have answers that are independent of what the data eventually showed.
Second: how did the CEO respond when results arrived? Did they communicate quickly and transparently? Did they have a plan for what to do next — with investors, with the team, with the program itself? Did they demonstrate the resilience and adaptability that the next phase will require? A CEO who responds to a trial setback with clarity, honesty, and a credible path forward has demonstrated something important about their capabilities, even in a painful moment.
The board that reflexively changes leadership after every clinical disappointment will find itself perpetually starting over, burning institutional knowledge, and signaling to the scientific community that it is not a stable environment for serious development work.
When the Evaluation Points to a Problem
Sometimes the evaluation does surface genuine performance concerns. The CEO may be struggling with the scale-up from startup operator to company builder. They may be losing the confidence of key investors. They may be avoiding difficult decisions or providing the board with overly optimistic updates that do not reflect the underlying reality.
When this happens, the board needs to distinguish between a performance gap that is coachable and one that is structural.
Coachable gaps are typically specific and skill-based: the CEO is a brilliant scientist but an inexperienced capital raiser; they are an effective external spokesperson but struggle with internal team management; they understand early-stage development but have not navigated a pivotal trial before. In these cases, targeted support — an executive coach, a strengthened CFO, a specific board member taking on a mentorship role — can close the gap without a leadership change.
Structural problems are different. If the CEO has lost the fundamental trust of the board or key investors, if they are consistently unable to recruit or retain scientific talent, if they have demonstrated a pattern of misrepresenting the state of the program — these are not coachable. The board that delays action on structural problems in the name of stability typically ends up with less of both.
A Note on Context
Clinical-stage biopharma is a demanding environment. The CEO is managing scientific uncertainty, funding pressure, regulatory complexity, and a highly specialized workforce — often simultaneously, often with inadequate resources, and often with a board that has strong opinions and limited bandwidth.
The most effective boards I have seen treat CEO evaluation not as a periodic judgment but as an ongoing conversation. The formal annual review matters. But so does the quality of dialogue in every board meeting, the candor of the quarterly check-ins, and the willingness of the board chair to surface concerns in real time rather than accumulating them for an annual conversation that arrives as a surprise.
A CEO who is evaluated fairly, given clear goals, and supported honestly is more likely to succeed. And in a clinical-stage company, CEO success is not a minor matter — it is directly tied to whether patients eventually get access to something that helps them.
That is a high enough stakes to warrant getting this right.
Lawrence Fine is CEO of AGCP Farmacêuticos and has served on biopharma boards through Phase II trials and multiple exit transactions.