Effective CEO-Board Partnerships

Successful CEO-board relationships demand trust, communication and alignment.

stock-illustration-26789199-unite-as-oneA healthy relationship between a CEO and a board can be a tremendous asset to a company. That happens when the board goes beyond being a legally required body—responsible for vigilance and protecting shareholder interests—to a strategic body that works hand-in-hand with the CEO to help the company thrive. But too often, CEO-board relationships are tense or even worse. Some CEOs—especially newer ones—want to control their boards or at least appear in control. And boards sometimes have their own ideas of the direction the company should take, ones that diverge from the ambitions of the CEO. These situations are problematic.

How can CEOs increase the quality of their relationships with their boards? They must remember that successful CEO-board partnerships revolve around a few key dynamics: trust, communication and alignment on strategy and pace of change. In fact, we asked more than 120 board directors of mid-sized companies across industries what makes CEO-board relationships tick, and 89.2% agreed that effective partnerships are based on high levels of trust.

“Successful CEO-board partnerships revolve around trust, communication and alignment on strategy and pace of change.”

Trust is intangible and there aren’t many specific or easy steps one can take to build it. Nevertheless, steadfast CEOs move toward it effectively. Successful CEOs and boards will work together to anticipate where their relationship may hit a rough patch or go off-track and agree on steps they will take together to address such an issue if it arose. Also, when the CEO actively keeps the board abreast of developments in the business, a more trusting and cooperative environment develops naturally.

Effective partnership between a board and a CEO also depends on consistent communication. They should discuss and reach agreement on objectives, performance expectations and business priorities—so the company’s leaders are all looking in the same direction.

Open and regular communication is the oil that goes between the gears and allows for effective problem-solving. In addition to formal, robust strategy discussions and performance reviews between the CEO and the board, the CEO should look for opportunities to pick up the phone for regular check-ins with the board chair or select members. Accordingly, lunch meetings, small talk and impromptu calls also pay off.

The experience of Steelcase, the publicly traded furniture company based in Michigan, brings to light the dynamics it takes to get this relationship right. Steelcase underwent a CEO succession two years ago, and incoming CEO Jim Keane took steps to ensure a positive and continually productive relationship with his board.

First, he invested time to get the relationship off on the right foot, meeting with the chairman and other board members to get to know them and discuss the future of the company. Keane also sought their input on business matters, both during and after his transition into the CEO role.

At one point, when he was in the process of assigning people to different roles in Asia, Europe and elsewhere, he decided to get the perspective of the board chairman first—rather than make the assignments and later inform the board, which would have been within his rights.

“Including the board in the decision-making process creates a collaborative environment,” says Guy Beaudin, an RHR International senior partner who has worked closely with Steelcase. “A key reason that Jim’s relationship with his board has been so successful is that they established explicit roles and expectations on both sides of the equation.”

Keane himself agrees. “There is a lot of gray area regarding the responsibilities of the board and of management. Having an ongoing dialogue that defines those roles is critical for building a successful CEO-board relationship,” he says.

When trust, communication and alignment on strategy and pace of change exist simultaneously between the CEO and board, CEOs can do something they almost never get to do on a day-to-day basis: be vulnerable, brainstorm and truly partner with their boards. In the life of a company and CEO, such moments can be invaluable.


MORE LIKE THIS

  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events

    Roundtable

    Strategic Planning Workshop

    1:00 - 5:00 pm

    Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process

    Executives expressed frustration with their current strategic planning process. Issues include:

    1. Lack of systematic approach (70%)
    2. Laundry lists without prioritization (68%)
    3. Decisions based on personalities rather than facts and information (65%)

     

    Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns.  They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning.  Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process.  This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented.  If you are ready for a Strategic Planning tune-up, select this workshop in your registration form.  The additional fee of $695 will be added to your total.

    To sign up, select this option in your registration form. Additional fee of $695 will be added to your total.

    New York, NY: ​​​Chief Executive's Corporate Citizenship Awards 2017

    Women in Leadership Seminar and Peer Discussion

    2:00 - 5:00 pm

    Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations. 

    Limited space available.

    To sign up, select this option in your registration form. Additional fee of $495 will be added to your total.

    Golf Outing

    10:30 - 5:00 pm
    General’s Retreat at Hermitage Golf Course
    Sponsored by UBS

    General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.

    The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.

    To sign up, select this option in your registration form. Additional fee of $295 will be added to your total.