2016

Issue 17

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BoardWorks International
Issue 17, 2016

Rebalancing Chief Executive Dominance of the Board

Over time, many chief executives come to dominate their boards. The longer this situation persists, the more difficult it becomes for the board to assert its authority which, ultimately, it must. Also, the more likely it is that the relationship between chief executive and board will break (if it has not already) when that rebalancing occurs. In the last issue, I explored some reasons why this kind of imbalance occurs (1). It is ironic that boards invariably blame their chief executive when this happens. The reality is that too many boards leave a performance vacuum their chief executive is obliged to fill.
There are steps boards can take to ensure they achieve a healthier relationship with their chief executive.

  1. Be clear about and active in its own job

    The board employs the chief executive even if that is not always how its seems. The board delegates to the chief executive any authority he or she has (2). These basics alone should guarantee that the board is always in the driving seat of the relationship. It helps considerably, however, if the board's job is well defined and actively implemented. The various elements of the board's job should be explicit and transparent (organisational constitution, board charter, governance policies, etc.). These should fit together in a coherent and consistent way without overlap or contradiction. If the board understands and does its own job well, it is less likely to have to worry about its chief executive.

  2. Give direction

    Some boards sit back, expecting their chief executive to drive the business, content to be observers and occasional critics. This passivity is often most apparent in how the board engages (or does not) in strategic planning. Whatever form 'strategic planning' takes, a governing board cannot avoid accountability for the interpretation and, ultimately, the fulfilment of organisational purpose. As part of that process, the board must articulate and take responsibility for defining the outcomes the organisation must deliver. When the board has defined the 'why' and the 'what' of organisational existence - the organisation's strategic intent - it leaves the chief executive free to plan how to deliver the desired results. Then boards can also hold their chief executives to account for the achievement of those results.

  3. Develop a mind of its own

    Some boards are very reluctant to meet without staff present. They fret, for example, that their chief executive will somehow feel excluded or untrusted. A positive, collaborative partnership between the board and chief executive is vital, but this does not mean that the board must include its chief executive in its every conversation. The board has its own functions to perform just as the chief executive does. Chief executives are the first to express concern if they think their board is sitting on their shoulder. Ideally, board-only time should be built into every board meeting. It will lead to improved board performance. That, in itself, has many benefits for a chief executive.

  4. Accept responsibility for how it spends its time

    Boards too often abrogate responsibility for planning their meetings to the chief executive or other staff. As a result, the board works on whatever its chief executive thinks is important or guesses might be of interest to the board. The chief executive may get this right most of the time. Even so, it is likely the board will end up feeling it is being 'led by the nose'. The board owes it to its chief executive to be active in planning and prioritising its own time.

  5. Ensure that executive reporting informs the board's role

    Directors consistently complain that they get 'too much of the wrong stuff'. That is because much of what chief executives deliver to their boards are descriptions of operational matters and their own activities. These reduce the board to little more than a spectator to management activity. Boards need to be explicit in setting reporting criteria that will extract the information they need to do their job. Then they need to insist on reporting that is related directly to those criteria.

  6. Select the right person for the job

    It is surprising just how often boards appoint chief executives who they know (or should know) are likely to be problematic. Problematic, for example, in the way the chief executive views the role of the board and their relationship with it. These are the kind of chief executives who will be are inherently disrespectful and disregarding of their board. The kind who will expect, for example, a relatively passive, 'rubber stamp' kind of board.  As leadership guru, the late Warren Bennis put it so aptly: boards get the chief executives they deserve.

  7. Be active in chief executive performance management

    Even with the right person in the chief executive's seat, it is by no means certain that there will be an appropriate and acceptable balance between the two roles. As the chief executive's employer, the board has a range of obligations that go with that position. To be a 'good employer,' the board must be explicit about performance expectations, must actively monitor the chief executive's performance, and provide feedback on how the chief executive is performing in the role. If there are concerns about aspects of performance, the board must provide support in addressing those. Too many boards shy away from this aspect of their responsibility. The relationship suffers as a consequence.

Conclusion

Over the years my colleagues and I have seen many situations where chief executives are perceived to dominate their boards. However, it has seldom been the case that the board itself has not been at least partially, if not primarily, the architect of this situation. When concerns arise about an overly dominant chief executive board should look first in the mirror!

Notes

(1) When the Chief Executive Dominates the Board

(2) There are exceptions to this in those situations - often relating to statutory authorities - where the applicable law prescribes aspects of the chief executive's responsibilities.

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