A dozen observations for healthy, valuable relationships between the board and CEO
Todd Ordal //January 11, 2018//
A dozen observations for healthy, valuable relationships between the board and CEO
Todd Ordal //January 11, 2018//
For the CEO of a company with a fiduciary board (as opposed to an advisory board), there’s perhaps nothing more complex than developing a healthy, mutually satisfying relationship with the board. I’ve been on numerous boards, worked for a few and observed many management-board relationships up close and personal. Few work on the relationship rather than just being in the relationship. This can be catastrophic (whether at home or at work).
When I was a young CEO, I worked for a board that a private equity firm controlled. This was a turnaround situation, so I had some initial leeway to be brash and demanding, because we had to do some emergency surgery to keep the company alive. I quickly did my best to keep the PE guys at arm’s length and had some success. Luckily I had a wise attorney who pointed out that this may not be a good long-term strategy and that when things turned around I’d have worn out my welcome. Good advice!
My mindset then wasn’t one of partnership. I had a whacky founder and a pedantic small shareholder on the board, and I saw it as a pool of glue that slowed me down.
Since then, I’ve worked with numerous boards and executive teams and observed high functioning relationships along with some dysfunction. Below are a dozen observations I’ve made of healthy, valuable relationships between the board and CEO. I won’t go through a litany of legal and fiduciary rules; there are plenty of high-priced lawyers to do that. I’m interested in how a CEO can optimize the relationship, which of course requires a talented chairman and willing board.
This relationship is as hard as, or harder than, marriage. If you don’t work on it, it won’t last.