Are ‘Board-Only’ Sessions An Acceptable And Worthwhile Practice?
A topic of conversation in a number of recent consulting assignments has been the issue of ‘board-only’ sessions. These are increasingly common and widely accepted as ‘best practice’ internationally. However, planned opportunities for boards to meet without their chief executive present still cause unease in some organisations. The practice is seen to be even more problematic when the chief executive is also a member of the board (e.g. as a ‘managing director’).
Resistance to the practice typically comes from chief executives who find the thought that the board might be talking about them behind their back unsettling to say the least. The boards that are resistant to the concept are often just philosophically opposed to the idea of excluding their chief executive from their conversations.
It is not a question of whether or not a board should meet without its chief executive present. A board has the right and, arguably, the need to do so from time to time. There are numerous board conversations for which the presence of the chief executive may be inappropriate, inhibiting, or perhaps even embarrassing to one or both parties. Typically this might include subjects such as:
- chief executive performance assessment;
- chief executive remuneration;
- ad hoc concerns about the judgement or conduct of the chief executive;
- concerns about the relationship between the board and chief executive;
- conflicts of interest involving either the chief executive or individual board members;
- scheduled meetings with the external auditor; and
- ad hoc meetings with board-commissioned independent reviewers of board or chief executive performance related matters.
Boards that deal effectively with such matters invariably do meet alone but, often, only as required. Consequently, when the board moves into a closed session it tends to spell ‘risk’, perhaps even ‘danger’, to their chief executive. Not surprisingly, therefore, many chief executives are anxious if not resistant to the idea that a board should meet on its own.
As we have watched the practice of scheduling regular board-only sessions take hold over the last 10 years or so, one thing has become apparent – and it is a surprise to many. Boards that routinely meet without their chief executive present do not focus on their chief executive but on their own performance (both past and future).
Their ‘in camera’ discussions include obvious things like the results of board and director performance evaluations and board member conflicts or relationship matters. However, perhaps more than anything else, boards making the best use of board-only time see it as an opportunity to ensure that their regular meeting is more constructive and productive. By having some time to themselves before their regular meeting gets underway they take ownership and responsibility for the conduct and outcome of the meeting. This is the case even when their chief executive has played a big part in the development of the agenda. They use the opportunity, for example, to:
- agree on the structure and content of the meeting (e.g. the priority that will be accorded to different items and their sequencing in the order of the meeting);
- provide advance notice to the chair about any issues individuals wish to have explored, enabling the chair to think about when best to give those directors an opportunity to offer their thoughts;
- voice any concerns members have about particular matters on the agenda. This enables the chair to ensure that their concern is handled in the most effective and constructive manner. For example, a concern about the quality of a staff report can be handled by deferring the applicable item to the next meeting. The chair can then brief the chief executive on the board’s concerns. otherwise such a concern would likely have surfaced during the meeting as overt and possibly unhelpful criticism of the chief executive or of the staff member concerned; or
- develop a collective consciousness about something on the agenda that would have been handled differently (and not so well) had the members of the board not had a chance to become aware of their similar (or dissimilar) thinking.
These conversations held without the chief executive present ensure that board meetings are the board’s meetings. The board is solely responsible for ensuring that they are conducted in an efficient and effective manner.
Notwithstanding the obvious benefits the board should be measured and transparent about its approach. The importance of the partnership between the board and the chief executive means the board should be sensitive to the natural anxiety their chief executive is likely to have about being excluded from any board discussion. We have found that board-only sessions are less threatening if they are routine – a regular part of the board’s meeting arrangement – just as an athlete limbers up ahead of an event.
It is also important for the chair to debrief the chief executive on the types of matters raised so the chief executive doesn’t have any reason to imagine that the board is plotting behind his/her back.
Another offset to chief executive anxiety is inviting the chief executive in to take part in the final stage of the board-only session – i.e. to extend it by having board and chief executive-only time. Many chief executives welcome the opportunity to ‘think aloud’ with their board ahead of important decisions he/she will need to make. The opportunity to talk with the board on a no-surprises’ basis and to seek input and advice is something many chief executives value. This is also an opportunity for the board to give the chief executive a ‘heads-up’ about anything that might be of concern to them in respect of matters coming up on the meeting agenda.
Board-only sessions should not make decisions; they should be essentially informal discussions preceding - and subject to - more formal procedures later. Reinforcing this informality some boards have off-site meetings over a meal before the formal board meeting is held.
Some boards have their board-only time after their formal meeting. Experience suggests, however, that holding such sessions before the board meeting proper gets underway is essential to obtain full benefit from the opportunity. This also avoids the awkwardness that is inevitable when the chief executive and others are asked to leave a meeting before it is really finished.
Board-only sessions are not a good idea when it denies to the chief executive the chance to do his/her job. A chief executive has a duty to ensure that their board is fully informed when it makes its decisions. The governing board is ultimately accountable for its own performance but it is in partnership with the chief executive and staff. It must be very careful of any steps it could take that might undermine the mutual trust and confidence that is essential to a successful partnership.