How to win your board over so you don’t wind up in a hole that may be hard to get out of.
I previously wrote about George, a CEO who had brought me in to work with him and his board. If you are a new CEO, I would like to share his story so you can gain some insight from his situation.
First, let me give you some background. George had become CEO 12 months earlier. In truth, George had never served on the board of a public company before, and wasn’t sure about everything involved. His previous background at Goldman Sachs, where he had often been involved in leverage buy out deals, had trained him to be aggressive and determined to have an impact in a short period of time.
He had taken over his job when the company was in a turnaround situation, and with his reputation on the line, he wasn’t going to suffer fools gladly, whether on the board or elsewhere. As a result, he had an early run in with the previous CEO, who told him he was going to require an office and a secretary. (Nix). “You can get an office and hire a secretary, but it’s not going to be here and the company isn’t going to pay for it.”
He also balked when the presiding board member told him he wanted to use the company plane over the weekend for a junket. He said, “Those planes are for business use, not personal use.” He also didn’t mingle well with certain directors who wished they had been appointed to the CEO’s job. His task orientation rather than relationship orientation made him overlook the importance of winning people over.
George’s actual performance in turning the company around was stellar, dramatically increasing the stock price by the end of the year. Yet his early run-ins with the board had unwittingly put him in a deep hole with board members that was difficult to clamber out of. It was difficult for him to get board approval for the more creative and innovative things he wanted to do to grow the business.
When George asked me to work with him on building a high performance board, I began doing some research, talking to people who had a lot of board room experience and reading whatever I could find. I shared some of these with George—publications like Directors and Boards Agenda, Directorship, and Corporate Board Members—so that he could learn about current board issues.
George and I had a conversation about what he might have done differently if he had it to do over. Let me share four things that any new CEO might find helpful in dealing with their board:
1) Get comfortable with governance issues by a CEO tutorial, books, or current magazines
2) Meet individually with every board member to get to know their agenda, rather than being task oriented
3) Establish the terms of your working relationship with the non-executive chair
4) Review the annual CEO review process that the board uses to assess your performance
Here also are four questions that a new CEO should ask the board and management:
1) What do you think are the most important things I need to learn about the board or boards in general?
2) What’s one thing you think is great about the board and one thing that frustrates you?
3) Is the conversation at the board formal or informal, open or closed, authentic or guarded?
4) What’s one thing the board has done to make a difference with management? Give three examples, if possible.