While some have quipped that CEO stands for Chief Ego Officer, our experience has been very much the contrary. The most successful CEOs today don’t have outsized egos or expect to call all the shots. They tend to be self-deprecating and accomplished at the art of leading by following and skillfully managing an array of teams that surround them to accomplish strategic goals.
One of the most critical teams the CEO has to manage is the board, and smart CEOs understand that a well-assembled board can be one of the most potent partners and resources a CEO can have. We recently spoke with Constance Lau, President and CEO of Hawaiian Electric Industries Inc., and Dante C. Parrini, Chairman and CEO of PH Glatfelter Co., to better understand how they partner with their boards. Consider asking yourself the same questions we asked them.
True or false:
I like to surround myself with people who are smarter than me. Lau observes, “There has been a growing recognition of the need to recruit directors with domain expertise, who are able to make judgments independent of the CEO. There is a newer breed of CEO, she says, who is a collaborator and team leader and views the board as a valuable resource to be leveraged—a team of strategically selected subject matter experts who are there to consult and advise.
I respect directors’ time and strive to run efficient, well-organized meetings with an action-oriented agenda. When he debuted as CEO in January 2011, Parrini also made it clear to the board that he “wanted to make the most of their limited time together by focusing on a short list of value creation or value destruction issues, rather than allocating too much of their time to administrative duties.”
I invest time in developing individual director relationships. By establishing a candid, personal relationship with each director early on, Parrini says he “learned what directors viewed as challenges and enabled a strong, mutually beneficial relationship between him and board, while ensuring roles and responsibilities were well understood.”
I make sure directors have access to the information they require at the right time. “It’s about CEOs learning to share power, says Lau, “but at the end of the day, the CEO is still charged with running the company.” She sees a different sort of CEO emerging who is comfortable with a strong oversight board and unafraid to be transparent and provide access to management as needed.
I know how to establish boundaries without alienating the board. Parrini said he told directors he wanted to “tap into the collective wisdom of the board,” but that he added, “I’m not asking you to run the company; I’ll do that.”
Both the role of the CEO and that of the board have morphed dramatically in the past decade. CEOs are now charged with orchestrating top teams, rather than singlehandedly running the whole show, extracting and applying value for the benefit of all stakeholders. Boards, for their part, are under constant scrutiny, and eager to actively partner with CEOs on key oversight responsibilities, including talent development and succession planning, as well as IT and risk management.
This far-higher level of engagement requires a greater investment of time for everyone. While CEOs feel pressure to demonstrate results, boards are certainly subject to other pressures from all sides to be more accountable, involved and visible. But the potential payoff of this relationship between the CEO and the board, aligned and working together toward strategic goals, can be significant.
So, how does the working relationship with your board measure up?