Watch the full recorded broadcast above.
The effectiveness of any CEO, Executive Director, or senior executive in working with their Board of Directors has significant implications for that executive’s career - and for the organization. Yet most executives receive little training on how to optimize their effectiveness in the boardroom.
In this session we're joined by Beverly Behan, HBA '81, one of the top board consultants in the world, to discuss the board-management relationship. The session will focus on how CEOs, Executive Directors and other top executives can be more effective in working with and deriving more value from their boards.
In this session:
- 2:48 - What are some of the current challenges for CEOs in working with their boards?
- 11:56 - Why do new CEOs struggle in working with boards and chairs?
- 14:46 - What is the role of other C-level executives in working with the board?
- 22:54 - Are there particular challenges to keep in mind with startup organizations? Non-profit organizations?
- 26:29 - Is it a valuable learning exercise for CEOs to seek out board positions?
- 28:30 - In Canada, we separate the roles of Chairperson and CEO - as opposed to the United States, where Chair/CEO roles are often combined. Which model is preferable in what situations?
- 33:10 - If an organization is best served by the removal of the CEO - or of the Chairperson - how can those situations be managed productively?
- 40:25 - What role does the board play in encouraging culture and aligning values?
- 46:05 - How actively involved should a board member get on issues relative to the executive team?
- 49:39 - What are some of the challenges involved when a founder and CEO steps into the Chairperson role, as recently occurred with Jeff Bezos and Amazon?
- 51:42 - How much time should new CEOs commit to the board relationship?
- 54:00 - What are the best tools and resources for developing your skills as a director?
- 55:37 - How do you measure the performance of a board?
Q&A With Beverly Behan
Q: I am new to the role of a board member and have years of management experience. I have been criticized for asking questions that are more management-oriented as opposed to strategy or governance oriented. How should I move forward to address this issue?
A: The governance/management line is the biggest challenge that many executives face in their first board role. The best approach I’ve seen a board take on this issue is to assign the new director to an incumbent director who has a fair bit of board experience and really understands the governance/management line – many boards call this a “board buddy program”. But even if your board hasn’t assigned you a “board buddy”, you can do this for yourself. Choose someone on the board that you respect and like – who has a good understanding of the governance/management line. Ask them to work with you for the next 3 or 4 board meetings. Here’s what you’re going to ask them to do:
- Schedule a Zoom or a call with them a day or two prior to the board meeting but a few days after the board books come out – so that you and your partner have both had a chance to review the board books in preparation for the meeting.
- As you review the board books, prepare some questions that come to your mind to ask on each agenda item.
- During your Zoom or call with your partner, go through the questions you’re thinking of asking. Ask your partner if these questions are at an appropriate governance level or if they are too much “in the weeds” of management. If the latter, ask your partner how you might reframe the question to take it to an appropriate oversight level.
- After you do this with your partner in preparation for 3 or 4 meetings, you’ll have a very good handle on that governance/management line – and probably won’t need more coaching.
Q: What are two or three qualities that make a Board Chair exceptional?
A: Three qualities of a Champion Board Chair:
- They aspire to excellence and want to lead a board that adds real value for the organization and earns the genuine respect of the CEO and executive team - not because of what the directors achieved in their careers, but because of the contributions the board makes. Continuous improvement is their mantra; they embrace innovative new ideas to keep their board fresh, vibrant and at the top of its game.
- They address director performance issues. Many Chairs shy away from dealing with a director's performance problems because they’re awkward. So they ignore the director who doesn’t do their homework in preparing for meetings, who becomes antagonistic or rude if someone challenges their perspective, who constantly crosses the management/governance line or who has a conflict of interest. But Champion Chairs deal with these problems; they recognize that ignoring them impacts the credibility of the entire board and their own integrity as a leader.
- They invest the time to build a highly constructive working relationship with the CEO and every director. They keep a finger on the pulse of the board to know what’s on directors’ minds; in doing so, they listen instead of trying to convince other directors to their point of view.
Q: With digital transformations playing such a pivotal role for enterprises, what has been your experience with the competence of board members to effectively manage the risks associated with these transformations?
A: Many boards I’ve worked with over the past decade have been prioritizing technology expertise when it comes to director recruitment because tech transformations are a big-ticket item and a pivotal component of the company’s strategy – yet no one on the board had the ability to drill down on an IT presentation in a meaningful way. This trend is bearing out in some recent director recruitment data:
- Spencer Stuart’s 2020 Board Index of the S&P 500 notes that in the United States, “the technology sector is the largest industry source of new directors, accounting for 24% of all new independent directors in 2020, a significant increase from 10% a decade ago.”
- Canadian boards may be lagging this trend slightly but still moving in this direction. The last Canadian Spencer Stuart Board Index I could find was from 2019 and it noted that 10% of new directors to the top 100 Canadian boards in 2019 had technology backgrounds vs 2% in 2015.
Q: Why did this disconnect occur regarding the board members’ lack of awareness of the competitive landscape? Don’t board members realize it’s their job to stay up to date with the industry and understand the company they’re overseeing?
A: Board members get their information about a company’s competitors, industry trends and other issues impacting the business in two ways: (i) From the information provided by management and (ii) From their own research to keep abreast of issues. As you point out, it’s entirely appropriate to expect board members to keep abreast of company issues on their own. But sadly, many do not. That’s why it’s a good idea to check in sometimes, as the new CEO did – and was astonished by what he found.
One would also expect that the prior CEO should have kept the board members aware of significant developments in the competitive landscape and proposed regulations impacting the business. But he didn’t bother; he saw the board as a nuisance and their contentious relationship resulted in his firing. Again, had the new CEO not done some due diligence on his own, he would never have discovered these problems – until he found himself in the strategy offsite, struggling with an apparent disconnect with his board who they didn’t have the information required to engage effectively on the corporate strategy.
Q: I would appreciate more suggestions for other members of senior management – other than the CEO – in terms of interacting with the board.
A: A client I was working with some years back had me interview all the board members about their 5 top executives to give each of these executives specific, constructive feedback about their board pre-reading and presentations. Some of that feedback reinforced the executives’ strengths and laid out very clearly the aspects of their approach that really impressed the board. One executive who received a lot of positive feedback was relatively new in his role and this meant the world to him. Another executive got some really tough feedback – her slides were confusing and busy, directors sensed that she tried to deflect rather than address difficult questions and she nearly always sat down during her board presentations; because she was diminutive in stature and seemed to hunch over her laptop, some directors could barely see or hear her when she was presenting.
Naturally, she was dismayed by the feedback; but she was savvy enough to act on it. She completely changed her approach in working with the board – she stood up, she ditched the busy slides, she stopped deflecting tough questions and took them on; a year later, the board considered her a star. She retired 2 years ago and now serves on two other boards – but always said that this feedback was a watershed moment in terms of her professional development. If you don’t want to collect and deliver feedback to executives individually, you can do it more generally – and create a half-day training session for the entire executive team based on what you learn from the board interviews.
Q: Some Chairs like to have pre-board meetings so that there are no surprises on the board. This practice seems to make the board meeting quite staged as opposed to providing real, fresh, impromptu thinking. Is this an “old school” approach? Thoughts on this practice?
A: Pre-board meetings or “run-through’s” of the entire board meeting with the executive team is a practice that can have significant downsides – as well as some real upsides – depending on how it’s used and why the Chair has adopted this practice. The downside, as you’ve pointed out, is that run-through’s can result in overly-scripted meetings that lack spontaneity; a director on one board I worked with where the CEO did run-throughs told me, “Our executive team is so overly-rehearsed prior to the board meetings that they seem almost robotic!” If the objective of the run-throughs is largely to script or control the meeting, it often creates the very problem you just described.
However, there are scenarios where run-through’s can be very beneficial. In fact, I recommended them to a board I worked with in 2018 – and here’s why: The presentations these executives made in board meetings with atrocious – people read their slides, droning on, putting the board to sleep. The Chair wanted executives spending more time in Q&A with the board. But they were terrified of the Q&A; they tried to stretch out their presentations to avoid it. So, the Chair adopted run-through’s : Each executive got 10 minutes to highlight the most important issues from their pre-reading, set up the dialogue and then launch into Q&A; their colleagues on the executive team fired questions at them and occasionally a board member showed up and did the same. The run-throughs were designed to give the executives greater confidence in handling the Q&A; in fact, many of the questions they got in the “run through” were exactly what the board ended up asking them during the presentation.
- How CEOs Manage Time, Harvard Business Review
- New CEOs and Boards (Free chapters menu offer), Beverly Behan
- Board and Director Evaluations: Innovations for 21st Century Governance Committees, Beverly Behan
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