Relationships don’t fix themselves.
I could capitalize, italicize, underline, and increase the font size of that sentence, but I don’t need to because you already know how true it is. As it is with parents, partners, and pool buddies, the CEO-Board relationship’s success is about much more than just being “good people”. There comes a day when the magic is gone and you’re noticing that things are becoming increasingly tense. When this happens, attentiveness, communication, and courage are non-negotiable.
The board’s role is fundamental to the success of any company, but the CEO’s role is even more pivotal. Boards (rightly!) invest significantly to select the best CEO and then they commit even more to lead that CEO well, giving plenty of latitude for them to make operational decisions, but engaging completely with them to set direction and refine strategy.
But sometimes the high-performing CEO finds themselves with dismissal papers on their desk and a press release cued for later that afternoon, and it all feels surreal. How did it get to this? As in any relationship that is terminated, there are often (at least) two sides to the story, with hits and misses by both parties. The scenario you see below isn’t true for every board-CEO relationship that falls apart, but is a very common one worth examining for relatable factors.
A Timeline from Two Sides
A Note to CEOs: Hold Up
You are undeniably competent, but your resolve to make the company a success may be undermining your own future. As eager as you might be to create clear direction for the future and move new initiatives forward, doing this “for the board” instead of “with the board” is a set up for whiplash. It's only a matter of time until the board reacts to regain the reins of control.
Consider the wisdom of the military leader who said, “If I get too far in front of my own people, they will mistake me for the enemy and shoot me.”
A Note to Boards: Step Up
Let's be clear: A CEO’s bias for action is not "the problem". The problem arises in the tendency for most boards to pull back on communication and engagement when they have an effective CEO.
“Who knows this business better than the person working in it 70 hours a week?!” directors chide.
“Why mess with a machine that’s working?!” they reason.
“The best way to help the CEO is just get out of the way!” boards joke.
But, in this way, they unwittingly demand the CEO to be the board in their place. Until they realize that the CEO is being the board in their place.
Regrettably, it is almost always too late then. Boards generally react with such defensiveness that they cannot imagine the CEO adjusting their style. Besides, CEOs who have had to set the direction, make the plans, and execute become so accustomed to the liberty that it is almost impossible for them to adjust their style. Relinquishing that latitude, even though they may have never wished for it, feels like a demotion and an invitation for bureaucracy.
You Don’t Need to Break Up
While I certainly hope the scenario above doesn’t feel like I read your personal journal, if it sounds familiar, take hope in the fact that there is an alternate ending that doesn’t involve press releases and dismissal papers.
The directors can step up to their governing responsibilities and exercise leadership in a supportive way, fusing the board-management team. The CEO can humbly and courageously call the board to its rightful responsibility, thanking them for their confidence in the CEO’s performance, but encouraging and inviting their full engagement.
No matter which party you relate to more, you have an opportunity to fix this. And it’s worth it to do so. When a competent CEO and an active governing board engage fully and deliver on their respective roles, it’s magic.
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