CEO & Board of Directors: Forging An Effective Relationship

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(This article, written by Rick Dacri, was originally published in Mainebiz)

Nobody takes care of the boss. The CEO’s job is to take care of everyone in the organization, but many CEOs feel no one is taking care of their personal and professional needs. Their Boards of Directors expect them to run and grow the business; carry out their mandates; recruit, retain and develop the internal talent; and prepare the organization for the future. CEOs accept this but expect to be taken care of just as they do for their staff. As one CEO said to me, “I work everyday trying to move this organization forward while keeping everybody happy and just once I’d like it if someone was there for me.”

It is the role of the Board to take care of their CEO. Not in a kumbuya sort of way, but more in a supportive manner. And this is where it often breaks down.

CEOs, like any employee, want their basic needs met and when they are not, resentment occurs. They want a Board that can provide:

  1. Clear expectations and accountability standards: After all, if you want her to drive the organization where you want, give her a map.
  2. Understand his needs and expectations: Boards need to take time to get to know what makes their CEO tick.
  3. Provide a timely performance review and know the market for executive compensation: Late reviews and salaries that fall below their peers are two areas that cause the greatest resentment resulting in breakdowns in the relations and turnover of CEOs.
  4. Set realistic performance goals: the strategic direction of the organization will only be achieved when this is done well.
  5. Provide ongoing feedback on performance: It’s lonely at the top. The CEO needs input from the Board.
  6. Support the CEO’s development: Grow your CEO. The world is constantly changing and your CEO must be able to keep up.

The role of the board is difficult and complex. Members generally serve on a volunteer basis and occasionally without direct experience in the organization’s business. Their responsibilities are enormous and require critical decision making during their often infrequent board meetings. These include setting the organization’s strategic direction and ensuring that the CEO is carrying out their mandates. Boards are taxed by the need to retain, motivate and when necessary, recruit top notch CEOs to run their organization. They know it is important to have:

  1. Sufficient bench strength in the organization
  2. A succession plan in case they lose their CEO
  3. Metrics to monitor the CEO’s performance

What can the Board and the CEO do to ensure that they maintain a strong, effective working relationship?

The Board should do the following:

  • Develop a professional job description for the CEO
  • Develop an executive performance appraisal process and if they have never conducted one, get assistance in writing and delivering the appraisal to the CEO
  • Develop annual goals and objectives for the CEO
  • Conduct a quarterly review with the CEO on his progress toward achieving these goals and objectives
  • Conduct an annual market analysis on the CEO’s compensation to ensure market competitiveness.
  • Implement incentives to move the organization forward
  • Support professional development
  • Implement a CEO Succession Plan and annually review for preparedness

The Board’s responsibilities are significant and if they are unable to do this, they should bring in an outside expert to assist them.  Organizational success depends on a strong relationship, with everyone operating optimally. Take care of your CEO, so that your CEO can take care of everyone else.

What are you doing to forge a positive relationship n your organization? Post in the comment section.

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4 Comments

Filed under careers, Leadership

4 responses to “CEO & Board of Directors: Forging An Effective Relationship

  1. Pingback: L’attention est de plus en plus mise sur l’efficience des C.A. | Les déficiences observées | Gouvernance | Jacques Grisé

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