The newly hired and first-time CEO was upset, and calling me for help. A long-time board member had just left their office after telling them to fire an employee the board member was at odds with. The board member was not a corporate officer and had no delegated authority over the CEO or personnel, yet was viewed as important and influential.
The CEO understood the board member’s demand was out of bounds, and wanted my advice before deciding how to handle the situation with their new boss, the board chair. This scenario might remind you of a situation you have faced. It might also suggest a scenario you fear happening. What would you do in the circumstance?
Over four decades I have faced many leadership challenges including as board director and chief executive. I have found one of the most difficult challenges to be in the balance between boards and executives. There are three truths to maintaining a healthy, productive balance.
First, leadership is always in context of the situation. Success for the board member and the CEO is less about directly running something and more about indirectly influencing demanding and sometimes difficult relationships. Especially if one of you is new to the role like the CEO who called me, it is essential to establish a relationship be built on mutual trust, accountability and understanding of each other’s history and limitations, so when the unexpected or extraordinary happens you are prepared to face it together.
Second, governance and administration must maintain respective responsibilities. Boards comply with corporate by-laws and regulations, guide strategic priorities while avoiding risk, and act with care and loyalty to the corporate entity and constituents served. Executive teams effectively drive performance toward desired results while being accountable to directors who may not know the organization’s industry and operation, and can bring differing interests and backgrounds. Just like staff expected to perform a specific job, board members need clear role descriptions, training and support on their collective and individual duties in order to serve effectively.
Third, even the brightest, best-intentioned boards fail when they lack what I call the duty of leadership. Beyond fiduciary and legal duties of care and loyalty such as avoiding conflicts of interest and maintaining confidentiality of insider information, boards must also provide engaged leadership to positively influence beliefs, behaviors, and outcomes for their corporation. The best boards accomplish this leadership duty by being compelling, credible champions who share a common vision, set a clear example, speak with one voice, and show commitment to collective success. They pursue their corporate mission together, fiercely protect its cultural values, bridge divides in private, and hold each other accountable.
What happened with the new CEO and the board member I mentioned at the start? After guiding a candid conversation between the board chair and CEO about the specific situation and how they needed to support each other, I facilitated a discussion among all board members about their collective and individual roles and responsibilities to the corporation including to act with care, loyalty and leadership. Shortly afterwards the difficult board member was persuaded to resign amicably, allowing the CEO and the board to move forward with trust and in alignment.
CEOs and board members who help each other balance roles, responsibilities, and a commitment to lead will foster more resilient, ready relationships that can provide answers when challenging situations arise.
Read more:Â A Tale Of Two CEO Succession Scenarios
