The board/CEO relationship requires honest feedback and a clear separation of duties.
I recently attended my first Private Company Governance Summit (PCGS), getting the opportunity to chat with Blue Bell Creameries board member and former CFO Bill Rankin. We had a discussion on the history of Blue Bell Creameries, along with insight into Rankin’s leadership style and the work he puts in to ensure that he remains vital and informed as a serving director.
Just as important were my unofficial duties, which were to observe the sessions and learn. During the three days in our nation’s capital, I learned that the relationship between board and CEO can impact the success of a company. It’s a tightrope walk that requires being a partner one day and a contrarian the next. Here are a few points of view that I found to be vital to ensuring a strong board/CEO relationship.
Be a partner to the CEO. As part of a panel on becoming and remaining an effective director, Michael Montelongo, independent board director for Civeo Corporation and Conduent Inc., detailed his “Be, Know, Do” philosophy. “Know” means mastering board essentials. “Do” means showing that you are a committed contributor to a team of directors. “Be” means being a selfless leader, one who puts the mission first and always has the best interests of people in mind. That extends to the relationship with the CEO, for whom a director should serve as both a mentor and an advisor.
Air your concerns. While a director should look at the relationship with the CEO as a partnership, that doesn’t mean abdicating the duty of oversight. Michael Sneed, retired executive vice president, global corporate affairs, and chief communication officer for Johnson & Johnson, and a board member of Wayfair, says the best CEOs push their company’s directors to disclose concerns. They want to hear challenges so they can have the best information with which to make decisions. Do you want to be consistently adversarial? No, but if a board member isn’t freely broadcasting their perspective, the company is losing value. Be tactful. But be honest.
Don’t try to do the CEO’s job. To maintain a positive relationship between a company’s board and its management, the boundaries of management duties and those of the board must be respected. As Sneed remarked, even if you have been a top executive and you think you know the best way for a situation to be managed, you must remain confident in the approach you have helped set forth and let management go through the growing pains of bringing the strategy to fruition. According to Glenn Wilson, chair of the board of directors for Communities First Foundation and board member for ELGA Credit Union, the same goes when trying to help the CEO set up new contacts and relationships. If a CEO requests a contact in a certain industry and you supply it, resist the need to check in on the connection. Don’t try to smooth the landing.
Be willing to help boost your CEO’s experience level. While it is not your job to cover your CEO’s tasks, there is nothing wrong with helping to equip him or her with the ability to take care of their responsibilities in a better fashion. To Lynn Clarke, director for The Vollrath Company, A. Duie Pyle and Basic American Foods, this can extend to arranging for a less experienced CEO of one of her companies to meet with the more-seasoned CEO of another in order to bolster the former’s industry bona fides. Not only did the less experienced CEO gain industry knowledge, but the CEO with the larger knowledge bank benefited from fresh ideas.
PCGS offered many more nuggets of information on the relationship between the board and management, but space is limited, so brevity is key. In short, board guidance is an enthusiastic “Yes!” Infringing on management? There isn’t a bigger no-no.