Every board, across all sectors, has as its most important job the selection of the CEO, hopefully a very good or exceptional CEO as they’re the stars you want, they’re the ones who produce current and future success for the entity.
However, one of life’s little ironies tells us that often it’s the troubled organisations that have the ‘star’ CEOs and in my time I’ve seen too many examples of so-called star CEOs, overflowing with charisma, who have driven the entity into the ground.
They’re either megalomaniacs or they push their own agenda which ends up failing or they’re profligate in spending money.
So how do you know a real star from a disa-star?
We need to go back and look at what it was that allowed the CEO to become all powerful.
In the commercial world, more often than not it has to do with charm and personality, where the CEO has it by the truckload and people tend to be duped by it; in the not-for-profit domain, it’s more likely to stem from the fact that the CEO has been in the post for a very long time and is considered the arbiter of all wisdom.
In these cases, there’s often a complacent board or a higher than normal turnover of directors and the longstanding CEO says “…I know more than these wet behind the ears idiots on the board and there is no way I’m going to tolerate any interference from them. “
In Frank Sinatra’s words, they’re going to do it their way, come hell or high water.
You’ll usually find, too, that the chair in these scenarios has a fulltime job elsewhere and is too time poor to do little other than chair the meetings, often leaving everything else to the CEO – from setting the agenda to determining the papers.
And he or she who sets the agenda controls what the board does!
In my experience, one of the tell-tale signs of a board under the sway of the CEO is when I’m discussing undertaking a board performance evaluation for the entity but have dealings only with the CEO about the matter. When either the CEO or the Company Secretary calls to request an evaluation and the Chair has nothing to do with the planning of it, I know immediately that there’s something wrong. Logic dictates that an evaluation of the board should be conducted in consultation with the Chair.
While it’s a sad indictment when a board is intimidated by, or in awe of, the CEO to such an extent that they don’t govern well which could mean the organisation suffers, the solution is so simple.
It’s that tired old chestnut I keep harping on about: the Chair is the first among equals, the buck stops with him or her and it is up to him or her to lead and work with the CEO. Then, the board will be performing its duty.
Until next time,