The prior three posts in this series have taken a close look at strategies that public/nonprofit chief executives can employ to forge close and productive working relationships with their boards. However, keeping this extremely precious partnership healthy over time is a tremendous challenge because it is by its very nature fragile and prone to rapidly deteriorate during times of significant, sustained stress. Three primary factors account for the fragility of this critical partnership:
- The partners – board members and the CEO reporting to them – make for a volatile cast of characters: typically highly ambitious, opinionated, strong-willed, argumentative, and motivated by diverse and often conflicting priorities.
- The steady stream of complex, high-stakes, and frequently negative issues the board and its CEO are expected to address tends to take the joy out of governing, making it a grinding ordeal that can keep stress at a dangerous level.
- Also militating against a positive and enduring board-CEO partnership is the adversarial tradition still alive in the public/nonprofit governance arena that defines the board’s governing role narrowly – and essentially negatively – as “keeping an eye on the critters” (the CEO and her executive team) so that they “don’t steal the store.”
I’m sad to report that many if not most public/nonprofit strategic governing teams – the board and its chief executive officer – don’t pay close-enough explicit attention to the health of this high-stakes working relationship to buck these formidable challenges. I’m reminded of a really outstanding chief executive – the superintendent of one of the country’s largest schools districts, with a stellar track record of educational innovation and funding raising – who not long after being named “Superintendent of the Year” by her state K-12 administrators association was dismissed without cause by a board vote of 6 to 1. Interviews with her school board members shortly after this shocking action indicated that the preeminent cause was their strong feeling that she’d taken her eye off the board. According to one board member, she was a “celebrity solo act” not really interested in collaboration with the board. What I find striking is that this school board and its superintendent had never – not once – met to discuss this relationship issue, much less to come up with a solution.
There’s good news, however. An increasing number of public/nonprofit boards and their CEOs have found a three-pronged strategy very effective in maintaining a close, positive, and productive relationship: (1) putting a structure for overseeing the partnership in place; (2) developing processes for managing the partnership; and (3) employing an effective process for the board to evaluate CEO performance at least annually.
In my experience, a simple structure that provides a very effective home for the board-CEO working relationship – ensuring it gets the attention it deserves – is a board standing committee. Often called the “governance” or “board operations” committee, it is typically headed by the board chair/president and consists of other board officers plus the CEO. Although its mission often includes other responsibilities, such as spearheading board capacity-building initiatives, its primary objective is to make sure that the board-CEO partnership remains healthy. In this regard, many governance/board operations committees annually update board-CEO communication and interaction guidelines (e.g., that the CEO will hold quarterly one-on-one meetings with every board member) and reach agreement on CEO leadership targets (e.g., to take the lead in cementing a strong alliance with a critical stakeholder, such as the local chamber of commerce). A key function of every governance/board operations committee I’ve worked with over the years is to set aside time – often quarterly – to assess the health of the board-CEO working relationship, identify issues, and fashion solutions.
One really critical step that many governance/board operations committees have taken is to significantly upgrade the process for annual evaluation of CEO performance – to make it a more meaningful and objective tool for strengthening the CEO’s leadership. In my experience, this often involves abandoning the traditional, highly subjective approach that has board members individually fill out forms rating their CEO’s functional excellence (executive competencies), often employing a 1 to 5 scale. For example, assessing how effective the CEO is in long-range financial planning, human resource management, and the like. Obviously, such individual assessments will always be in the eyes of the individual beholders, and, therefore, terribly subjective. They are essentially individual opinion polls relating to executive management skills, not measurable outcomes, and tabulating the ratings merely creates the illusion of scientific precision.
A far more meaningful approach being used by a growing number of governance/board operations committees is, first, to reach consensus on two tiers of CEO performance targets measuring actual outcomes: organization-wide relating to targets in the annual operating plan (e.g., in the case of a school district, to lower the student dropout rate by 6 percent next fiscal year); and what we call “CEO-centric” targets involving a significant commitment of CEO time (e.g., in the case of a local economic development corporation, the CEO’s negotiating an agreement with the chamber of commerce to carry out a job creation initiative). Second, the committee holds a special work session not long after the end of the fiscal year to assess CEO performance in achieving these two sets of targets.
