5 Things CEOs Really Want From Their Boards
As stewards of business, CEOs and boards of directors are expected to demonstrate profitable governance—yet their relationship is often overly complicated and dysfunctional, rearing unwanted outcomes like poor strategy and slow company growth.
To identify some of the obstacles behind this discrepancy, Harvard Business Review asked CEOs to illuminate their side of the story. Pulling from both good and bad experiences, these prominent executives offered advice for how directors can become a more strategic asset to the CEO-board relationship.
When it comes to board member behavior, found CEOs long for these five traits:
1. "Focus more on risks that are crucial to the future of the enterprise."
A timid boardroom can stifle bold, perhaps risky decisions that would have otherwise been a healthy move for the company. "Board members are supposed to bring long-term prudence to a company," said one interviewed executive. Unfortunately, too much prudence means never surpassing the status quo.
To really get on a CEO's nerves, blame a lack of gumption on the fear of bad press. CEOs contest that reputation management and business management are two different ball games, and you can't always play it safe if you want your company to grow. Time Warner CEO Jeff Bewkes told HBR, "If directors join a board because of status or reputation or are risk-averse because of legal liability, then they are not as interested in making money—and to that extent, they don't represent the interests of the shareholders."
2. "Do your homework!"
There's really no excuse for being unprepared for boardroom discussions. As one CEO put it, "If you don't take the time and effort to learn the business, I can't really have a dialogue with you."
While directors should keep themselves informed as much as possible, CEOs recognize their responsibility to keep board members in the loop by communicating between formal meetings. Collaborative effort to stay up-to-date can include agenda recaps, informal update letters and phone calls.
3. "Bring broad, relevant knowledge to the table."
CEOs don't want a circle of "like-minded cronies," "celebrity directors," or retired professionals. They want diversity, character and credentials.
As advisers, board members should bring varying skills and perspectives to the company. While the wisdom of experience is invaluable, CEOs also want younger, more digitally savvy board members at the table. Unfortunately, CEOs in HBR's study mentioned it's often difficult to get aged board members to make way for growth.
4. "Do more to challenge strategy constructively."
Board members should not be averse to conflict. In fact, CEOs are "disappointed by the absence of energetic debate in the boardroom." An opinionated remark can lead to productive discussion and decision-making.
On the other hand, no one enjoys a board meeting that's more like a skirmish than a healthy debate. Deconstructive comments—especially on past mistakes or unrelated issues—have no place in the boardroom. Disagreement via insightful questions will give everyone a clearer idea of the situation and how the company should act.
5. "Make succession less, not more, disruptive to operations."
CEO-board relations often tense up when it comes to the planning and process of succession. With the outgoing CEO having little control, board members need to step up to help make the transition orderly and clearly communicated.
HBR noted that CEOs are especially irked when board members overlook several internal candidates in favor of an external one. Though outside contenders may seem like a perfect fit in a short interview, they haven't been groomed to make their way up the leadership ladder like those already working for the company.
Overall, the CEOs in HBR's survey reiterate that the best partnerships are bound by respect and commitment. A great board doesn't sit back and review—its members are active in offering support, insight and counsel. Through candid and respectful interactions across the table, CEOs and boards can foster effective relationships.
Goay Joe Lie
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