Over a new CEO’s first 100 days, it’s crucial to establish, define and lay the groundwork for sustaining a strong relationship with the board.
The CEO-board relationship is defined by roles that differ from, but depend on, each other. As CEO, you are in charge of developing and executing strategy, while the board is responsible for approving and advising you on it. Day-to-day operations are the responsibility of the CEO, with the board providing a broader perspective.
There are more checks and balances than ever for today’s CEOs. Board members are now intimately involved with the business and less forgiving of poor CEO performance, so it is in the CEO’s best interest to ensure a sound relationship with the board.
Forming a partnership
When new CEOs inherit a board, they need to determine quickly how to build a productive working relationship with that board — and learn who their business partners are on that board.
Board culture can complicate matters, especially if it’s not aligned with the business’ direction. There’s also the issue of group thinking, in which the thoughts of individual board members clash with group opinion but tend to be stifled for the sake of consensus. This can result in a wall of silence between the board and the CEO, with the board effectively shutting out the CEO.
It is critical that the board and CEO are on the same wavelength, yet many CEOs underestimate the importance of understanding the board’s interests and fail to develop and maintain the relationship necessary to determine the company’s best strategy.
Whether you are an internal or external hire, one-on-one listening and learning opens up communications, reveals insights about the company and business, and highlights resources and potential problems.
Individual board members can offer not only expertise, but also private counsel. That’s why many CEOs rely on a confidant on the board to act as a sounding board for new ideas.
Conversations with confidants and individual board members give new CEOs the opportunity to subtly shift the board dynamics, so that it becomes their board rather than that of their predecessor. The questions you ask, how you ask them and the answers you give demonstrate that you intend to make your own mark.
Establishing your credibility
Once you’ve started the job, you’ll have to prove to your board that they made the right choice. Business results will eventually speak for themselves, but initially you’ll need to focus on establishing relationships and building credibility. To accomplish that, you need to develop a sound agenda, become more intimately knowledgeable about the business, and listen to — and learn from — the board. Also, strive to build a committed management team and maintain a degree of humility.
Communication
Communication is vital in the first 100 days. One of the worst things a new CEO can do is make a major change without aligning with the board on the perception of the business. Despite many high-profile examples of this playing out, many CEOs neglect to keep their boards informed.
So it’s crucial to get a dialogue going. Former Gillette CEO Jim Kilts recommends that new CEOs talk to their boards about their priorities, what they’re going to work on and what the success drivers are. Encourage the board to meet without you present — you need to trust them to attend to their business and communicate directors’ feedback.
How it should work
In an open relationship, the board is an extension of the CEO’s management and support team. How you use the board will also determine success: The distinction between the authority of the CEO and that of the board is essential to a healthy relationship, but one that is not always clear — especially when the former CEO remains on the board.
On one hand, a former CEO can be a valuable source of information and experience. On the other hand, his or her presence can undermine the new CEO and hinder change. Views vary about whether the former CEO should remain on the board, but, in general, people agree that the former CEO’s tenure on the board should be limited.
Conclusion
Your ability to establish a productive relationship with the board depends on whether you build a true partnership and lay the groundwork for working with your board. It is always a challenge to shape a productive relationship with a new business partner, especially one with the power to hire and fire you. Effective communication is critical to the partnership and, therefore, to your success.