2012

Issue 12

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BoardWorks International
Issue 12, 2012

Why It Is Not a Good Idea for the Board to Help the Chief Executive

Boards often have around their table members who have a great deal more management (and life) experience than their chief executives. Directors are usually keen to share their experience with their chief executives. In theory, they should be a great resource for a chief executive to tap into.

Unfortunately, realising this potential is not as easy as it should be. No chief executive wants to suggest that they are not up to the job. A bigger impediment, however, is likely to be a board's own overeagerness to help. This is sometimes rationalised 'because our chief executive is young and inexperienced'. However, even boards supported by experienced and capable management teams are inclined to dive into operational matters uninvited.

Despite the best of board intentions, however, actions taken to help or protect their chief executive are usually problematic.

 

Stepping onto the slippery slope

Regardless of motive or circumstance, boards or individual directors attempting to help their chief executive to do his/her job create many potential risks. For example, these include:

  • That the chief executive's accountability to the board for organisational operational performance is undermined. Governance and management roles become confused and accountabilities muddied. The chance that important matters will be mishandled or 'fall through the cracks' is increased. A recent example is illustrative. A director engaged, unilaterally, with a key supplier with whom he had a personal relationship. The director was unaware the relationship with that supplier was being renegotiated. The negotiation team was unaware of the directors relationship and engagement with the supplier. The director, unwittingly, cut right across the negotiating strategy seriously weakening the teams position.
  • That the chief executive ends up with multiple and, quite possibly, misaligned masters. The collective authority and single voice of the board is undermined. It is likely that individual directors will convey different messages and different priorities to those that have been (or would-be) expressed, given the chance, by the board as a whole.
  • That operational decisions are slowed. The chief executive is expected to continually refer back to the board or individual directors for 'advice' before she can get on with her job.
  • That the board neglects its own job so focused is it on helping the chief executive do his.
  • That the chief executive has to contend with frequent, potentially intrusive and distracting interruptions to her working day. Directors feel free to phone or email the chief executive whenever the mood takes them. "I've been thinking about... Why dont you... Have you?"
  • That signals from a board constantly suggesting how the chief executive should do his job are demotivating and undermine the chief executives confidence. In extreme cases, the result is a serious mental health problem.
  • That the babble of advice and direction from the governance group encourages some chief executives to use this to play one source of 'direction' off against another. A chief executive with multiple masters effectively has none.
  • That it facilitates internal politics. Individual directors, through their 'ersonal 'supervision' or 'assistance' to the chief executive, seek to gain an advantage over fellow board members.
  • That the board demonstrates ignorance of, or a lack of respect for, the integrity of its delegation to the chief executive. A common example is board committees that deal directly with operational matters previously delegated to the chief executive and, in turn, to lower level staff. A similar conflict is often set up when board members are given individual 'portfolio' responsibilities.
  • That the chief executive is unable to grow and develop in the role. Opportunities to learn from experience are seriously restricted when the chief executive is 'protected' from making what the board might consider as mistakes.
  • That the boards actions encourage a form of dependency. This results in a chief executive who does not think for himself and who does not make any significant decision without at least running it past an influential board member. Closely related is the 'passing the buck' or 'upwards delegation' risk. The chief executive subtly passes responsibility for difficult or potentially contentious operational decisions to the board.
  • That the working relationship between the chair and the chief executive is undermined. Most boards expect (and need) their chair to be an effective pivot point between the board and the chief executive. This is mostly about channelling communication and ensuring that the boards expectations are clearly expressed and understood. Some boards accept that individual directors will have frequent direct access to the chief executive to, for example, provide close supervision of a particular project or activity. However, this can easily take away from the coherent and explicit linkage of chief executive to the board, via the chair. In the process, the chairs broader leadership of the board can also be weakened.
  • That the boards realisation it has a chief executive who is basically not up to the job is delayed until unnecessary damage has been to both the organisation and to the chief executive.

This list could be extended further but the message is clear. Chief executives, regardless of their level of experience, should be expected -  and allowed  - to get on with their job. Any shortcomings (and all chief executives have them) should be dealt with separately, transparently, and on their merits.

Providing the kind of assistance to the chief executive that IS useful

If there are too many risks in providing direct assistance to the chief executive, what might constitute a better approach? The primary answer lies in an actively applied system of performance management. Components of such a system are likely to include:

  1. A clear and up-to-date statement of performance expectations. This should consist primarily of the results to be achieved (including priorities) and the situations and circumstances to be avoided (i.e. the risks to be managed).
  2. An adequate and appropriate delegation framework that ensures the chief executive has sufficient authority to take the actions required to fulfil the boards performance expectations.
  3. Assignment of sufficient resources (usually via plan and budgetary approvals) to achieve the desired results and manage foreseeable risks.
  4. A regular and rigourous performance monitoring process. This will include agreed performance measures and approaches to collecting monitoring information.
  5. Feedback. It will also include a process of continuous feedback on the chief executives compliance with the board's expectations and on his/her performance generally.
  6. Not least, it will also include sincere pastoral support, and active encouragement for ongoing professional development.

The chief executives role is very important but it is the board that is ultimately accountable for organisational performance. The chief executives job is sequential to the boards own job. Until delegated some of the boards authority the chief executive does not even have a job. Therefore, effective self-management and high quality performance by the board itself must come first. This is underlined by the nature of the first three of the components listed above.

Through a structured and systematic performance management framework the board creates a situation in which the chief executive is free (and safe) to operate. The explicit process of performance planning and delegation addresses, up-front, any chief executive performance risks the board might be concerned about. Unplanned, unexpected and uninvited interventions to 'help' the chief executive are not needed. The integrity of the boards delegation to the chief executive is protected and reinforced.

By the same token, when this system is in place, the chief executive is more likely to take advantage of the expertise and experience of individual board members. The chief executive can ask a director for help without the risk that she will take over some part of his job. The director can provide input without fear that the responsibility has ended up on her shoulders.

 

 

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