Managing director of Vincent Consulting
In earlier years I have both enjoyed, and endured, working with Boards of Directors.
Boards including the CEO or executive manager should have very defined roles within the organisation. If these roles are not clarified and understood, complications and inevitably conflict will arise.
I see responsibilities of Boards as being:
- Recruitment, management, mentoring and working collaboratively with the CEO.
- Providing direction through establishing the vision, mission, goals and strategic direction for the organisation.
- Establishing sound governance policy and process.
- Protecting the financial interests of the owners and the general wellbeing of the organisation including ensuring all stakeholders are benefiting from the relationship.
- Annual audits of the business and compliance with fiduciary duties.
To ensure a collaborative and unified relationship between the CEO and the Board requires having clearly defined roles for each participant. Tensions and disconnects occur. These are not all bad, as sometimes often disagreements lead to healthy debate and much improved outcomes. The trick is having the mutual respect for each party’s views.
Listening to hear, listening to understand, valuing each other and trust are the most powerful tools in the governance tool box.
It is important to have in place mechanisms and process to handle conflict and disagreement so that best outcomes become possible. I recall working in a matrix management role where there were three regional CEOs. If two had a disagreement, the third person would mediate. The system worked extremely well.
My first advice to ensure improved Board-CEO relations is for parties to effectively listen to each other at all times. Give people time to talk and share. Around the table are people with intelligence and varied experiences. Share the experience, value others, inputs and you will achieve greater outcomes.
Business plans are by nature fluid and have to be so. Our markets change. New legislation gets passed. What was a clearly defined market strategy now needs tweaking. The best Boards and CEOs understand this and must proactively work together with a sense of commonality and teamwork. They will then be more likely to establish the best positioning and strategy to survive and thrive.
The Board is there to support and encourage, to lead and to direct. Discussions should be constructive and positive rather than destructive and negative.
The Board environment should be positive, affirming, supportive and encouraging. Owners, Boards, CEO’s staff and clients will all reap benefits.
After all, their responsibilities are to the organisation and they are there to serve.