New CEOs and Their Boards
Probably one of the sharpest revelations to any newly minted CEO is that he or she no longer has a boss but rather a board to report to. Establishing a constructive working relationship with that board is one of the most important things for any new CEO to accomplish in the first few months of taking the helm, particularly if he or she aspires to stay in the job for any length of time.
Most new CEOs inherit the boards of their predecessors, and many want to have a very different working relationship with that board—one that adds even more value for them and the company. Others are content to simply build on a productive relationship that may already exist. Regardless of your objective, here are three things to think about doing in your first six months to help you set the right tone in your board/CEO relationship:
• Establish Your Working Relationship with the Lead/Presiding Director (or Non-Executive Chair)
If your board has a lead or presiding director (BusinessWeek.com, 1/8/08) (and nearly half the boards of the S&P 1500 now do), it's critical to invest time in building a good two-way relationship with this board member right at the outset. Typically, lead/presiding directors enjoy the respect of their fellow directors and have a good understanding of the board's dynamics and perspectives. Moreover, the lead/presiding director is the person who leads executive sessions of the board when you are out of the room and debriefs with you afterward. These conversations can be particularly important as "early warning" signals to new CEOs in their critical first few months and years.
Take the time to talk to the lead/presiding director about how you want to work with him or her. Ask about his/her working relationship with your predecessor: How often did they meet or communicate between board meetings? What did the lead/presiding director feel worked well in their relationship and what changes might make your working relationship even more productive? What's on the board's mind and what do board members see as the key priorities for you, as CEO, over the next 6, 12, and 18 months?
You may be surprised to find that some issues are viewed as critically important by the board that you didn't view as priority items at all; that's vital intelligence for any new CEO.
• Meet One-on-One with Each Board Member
Often a new CEO will have met individually with each board member just a few months prior to the leadership change, so scheduling another round of meetings may seem redundant. But these are two very different sets of meetings: The first round was essentially a series of job interviews, with you in the role of job applicant; a final step for the board members in confirming the decision to make you the CEO.
Now that you've taken the job, it's time to have a new series of meetings with a very different focus: that of building rapport with your directors and starting off your working relationship. CEOs who rush this process and try to see all the board members in a few days or weeks typically get far less value from it than those who schedule their meetings over dinners or weekend brunches spaced out over the first six or eight months. After all, the real purpose is to let you and your board members get to know each other as people.
Ask members what they've enjoyed the most about being on the board thus far and what, if anything, has frustrated them. Share your objectives for the company and ask for their perspectives on some of the challenges and opportunities that they see ahead. Canvass their views on the board/management relationship: What's worked well in the past and what, if anything, would they like to change?
One CEO who asked this question found that her predecessor had been intensely resented for his imperial style; the board was clamoring for an opportunity to be a true "working board" that made a contribution. To demonstrate that she wanted to work differently with the board, she moved her next few board meetings from the company's mahogany boardroom to a downstairs lunchroom.
• Establish Your Expectations
One of the most constructive exercises that a new CEO can undertake in establishing his/her relationship with the board is the simple step of talking about expectations. The CEO of a newly merged company who had inherited several board members from an acquisition used this approach very effectively at the first meeting of the merged board by saying, "This is a new start for us in working together so I'd like to talk about what you can expect from me and my management team and what I expect from you, collectively as a board and as individual directors."
Nearly all of the board members told her afterward how much they appreciated this discussion, and she described it as "the moment when I finally felt like the CEO of this new company."