Daily question: I’m a CEO, how do I get more value from my board?

There are a large number of reasons why a CEO might be frustrated with their board. To help you explore the potential causes, there’s eight questions to think about below.

1. Is there a clear understanding of roles?

It’s important that there’s a clear line between board and management. A board that is constantly stepping on management’s toes will lead to frustration and disempowerment from the management team.

Defining a clear line between board and management is typically done through a simple language charter and delegations. These should be easy enough to understand that anyone in the business can pick up the documents and quickly understand what is expected behaviour.

It’s important to note that the line between board and management can shift and evolve over time. A board facing a crisis will generally be much more involved in the day-to-day operations of the business. These shifts are perfectly normal, however they can become problematic if the changes are never discussed and documented. It’s important that any change in the line is made clear to all members of the board and management team, and that this change is written down on paper.

At times, there can be a temptation for members of the board to become more involved in parts of the business where they doubt management capability. Whilst it’s critical that the board have a clear understanding of management capability, micro-management is not an alternative to performance management. Performance concerns must be discussed and dealt with through the CEO, or else there is risk of disempowering the management team and confusing reporting relationships.

Whilst it’s critical that the board have a clear understanding of management capability, micro-management is not an alternative to performance management

2. As CEO, do you understand the role of the board?

As a starting point, as a CEO it’s important to accept that the board is not there to serve you. The board is there to get the best outcomes for shareholders. Maintaining a good board-CEO relationship generally helps to get the best outcomes for shareholders, but it’s important not to confuse the primary and secondary goals of the board.

As part of this, it’s important to understand that there should always be some productive tension in the relationship between board and CEO. This is expected from a board fulfilling its responsibilities.

3. Is there an open chair-CEO relationship?

As CEO, the chair is your first stop in building a stronger relationship with the board. If you don’t have a strong relationship with your chair, it’s very difficult to have a productive relationship with the broader board.

The chair should be your sounding board in working with the board. If you have frustrations with the way the board is working for you and the organisation, a private discussion with the chair should always be the starting point.

However, we see many circumstances where the CEO-chair relationship is neither open nor productive. In these circumstances it’s important to prioritise the relationship before talking about board productivity. It can be helpful to involve an external coach or tools (such as BoardOutlook’s 360 or psychometric) to help both parties better understand current issues and ways to strengthen the relationship.

4. Does the board have visibility over front of mind issues for the CEO?

In a highly productive board-CEO relationship, the board will have ongoing visibility to front-of-mind issues for the CEO. Understanding these front-of-mind issues helps the board to align to the areas of highest value for the CEO.

These issues are rarely documented in the board pack, and may occur in the context of a pre-board dinner or as part of a regular discussion item.

In a highly productive board-CEO relationship, the board will have ongoing visibility to front of mind issues for the CEO. Understanding these front of mind issues helps the board to align to the areas of highest value for the CEO.

5. Does the board have the right level of expertise?

If you’re not getting value from the board, it is possible that directors simply don’t have the right level of expertise or experience. In these circumstances, don’t try and extract blood from a stone. Asking for more involvement from the wrong people is a roadmap to frustration.

These circumstances can happen when directors lose currency over long board appointments, or as the business evolves and changes. When this happens, it’s important to talk to your chair about the skills matrix and the plan for board renewal. Done well, this should be a highly productive conversation focused on connections between the long term strategy of the business and the required skills of the board.

6. Is the board and management team spending enough time together out of meeting?

Boards that add substantial value to the management team generally spend a substantial amount of time together with management outside of formal meetings.

This interaction may take the form of board dinners, site visits, strategy days or any other combination of events. What is most critical is that the board and management team are taking the time to build a relationship and deeply understand the challenges that are confronting the business.

7. Is the management team integrated into the board review process?

To ensure you’re getting as much value as possible from your board, it’s important to make sure the management team is integrated into your board review process.

This will help to identify any areas of friction, and ways that the board can drive value with the management team. As CEO, it is common to use a rigorous review process as a reset of the board-management relationship. A strong review process will provide strong data that you can use to suggest changes in any specific areas of the relationship.

The best board-CEO relationships are open and bilateral. Feedback can flow in both directions. However this quality of relationship is not common and takes time to develop. A great review process can help in the development of this relationship

8. Does the board think about opportunity costs?

If the board is causing problems for the management team with excessive requests or intervention in the business, it’s important to talk about opportunity costs.

The board and management team will have typically agreed on strategic and business plan imperatives. When talking about opportunity costs, the CEO should anchor to these imperatives and talk about the tradeoffs in terms of time and attention.

It’s important to recognise that the management team will always think some requests are excessive or a waste of time, but building a mindset of opportunity cost will allow more balanced discussions about these issues.

Get an unfair advantage, subscribe to the free monthly update

The best of The Resolution, delivered to your inbox every month