Platt Perspective on Business and Technology

Joining, serving on and leading a board of directors – 15: vetting and interviewing, hiring and managing a prospective CEO – 2

Posted in job search and career development by Timothy Platt on October 12, 2011

This is my fifteenth installment in a series on joining, serving on and leading a board of directors (see my Guide to Effective Job Search and Career Development – 2, postings 179-192) and my second in that to focus on the management side of board participation (see Part 14: vetting and interviewing, hiring and managing a prospective CEO – 1.)

In Part 14 I discussed the barriers to board effectiveness in performing its key roles when the board itself fits a dysfunctional pattern – following a rubber stamp or a ruggedly independent model as described in my basic board taxonomy. I finished that posting with the beginning of a discussion of effective, strategically aligned boards and how they work with the CEO and their executive team, and my goal in this posting is to continue that here. And I begin that by sharing an important observation:

• In an effective board, members hold primary allegiance to the business or organization and not to the person of the CEO or president.

This does not mean board members cannot or should not work in a cordial, friendly manner with their organization’s CEO or with members of their executive team. I will in fact state that cordial, positive relations and their cultivation can make all of the difference when facing potential for conflict or disagreement, and they can make the difference as far as building a basis for trust. But the board is board to the organization and not to the person of the particular CEO in place. And this becomes particularly important if and when there are points of conflict or disagreement that have to be faced.

When everything is going smoothly and the board and executive suite are in agreement there are no real problems and if that were the only circumstance that could arise I would probably not be writing this posting. But issues and challenges do arise, and with time for any board and for any organization.

• What do you do if there is need to formally criticize, dismiss or fire the CEO?

And closely related to that question,

• How do you best determine the appropriate level and type of response when problems do arise?

First and foremost you need to know what is really happening and that is where an effective board needs information so that they can make meaningful, valid decisions.

• If a CEO and their executive team members cannot or will not provide their board with the information they genuinely need to do their job, that is a serious problem and a source of conflict that simple good will and cordiality will not cover.
• If the CEO and their executive team do share information and that information raises serious questions and concerns, that can raise matters of board oversight to the level I write of here.
• What does “serious” mean in this context? Any real evidence suggesting that the CEO or members of their executive team are pursuing legally questionable practices or raising risk of litigation exposure would be considered very serious. So would systematic and willful pursuit of business strategy and practices that are clearly failing, and I add evidence of conflicts of interest here too.
• I will add that in the real world board members hear, see and learn about their organization and the people in it from a much wider range of sources than just the CEO and their executive team. Effective board members gather information through both formal executive suite to board channels, and through more informal channels too. If board members see a news story on TV or in the newspapers, or posted online through a reputable channel, or see an interview with the CEO and this reveals information about the organization at sharp variance with the documents and information they have been provided with as board members – that can and should raise serious concern.

Up to now I have touched on a few of the possibilities here as to how a board and the CEO can find themselves facing a challenge or even a crisis that would call for board action with regard to the CEO. What should board members as individuals and boards as a group do when confronted with news or information that raises questions concerning the CEO and their conduct? That is going to be to topic of the next installment in this series.

I have been posting on the general topic area of jobs and careers to my Guide to Effective Job Search and Career Development directory. I have recently started a second, continuation page to that directory at Guide to Effective Job Search and Career Development – 2 and you will be able to find this and subsequent series on jobs and careers there.

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