Here’s the truth: Most CEOs really don’t like working with boards. Don’t get me wrong, there are boards that add value, operate well, provide support and governance, and take their fiduciary responsibility seriously. Even in these cases, however, a large portion of a CEO’s time is spent trying to manage the board, which can be akin to herding cats. This can be especially true when you’re leading a business transformation and need to get your board on board.
I’m not advocating doing away with boards! As both a CEO and a board member, I believe firmly in the need, value, and benefits that boards provide. At the same time, there are things CXOs can do to make working with, as well as for, boards of directors easier and more productive.
My fellow Acceleration Economy Analyst Wayne Sadin and I were panelists with Gayle Keller for a discussion on “Getting Your Board on Board to Accelerate Your Digital Transformation“ at the recent Cloud Wars Expo in San Francisco. Moderated by our colleague, Scott Vaughan, the discussion was lively, fueling a ton of engagement during and after the panel with attendees. It was clear from the feedback that many CXOs are struggling with how to work with their boards. In thinking more deeply about the topic, and with encouragement from attendees and colleagues, I wanted to share some thoughts and frameworks for working with boards from my experience as a 4X CEO.
Not All Boards Are the Same
The default standard picture most people have of a board of directors is the large, public company board or a high-profile unicorn start-up board. While these do exist, they are in the minority. The vast majority of boards of directors are serving small-to-medium, private companies. In some cases, these boards have voting rights and shares in the company. In other cases, the board is more of an advisory group. As a result, the range of backgrounds, qualifications, or business experience of board members can vary widely.
As an incoming CEO who reports to a board of directors (BOD), a key first step is to get a solid understanding of what type of board the company has, what the roles and responsibilities are, whether or not they have votes, earn and/or own shares in the company, or receive compensation, and what level of understanding of the core business they have. In my experience, most companies do an exhaustive analysis of an incoming chief executive. However, they don’t regularly provide that executive with much in the way of background or details about the board. This is true even in public companies I’ve worked in.
A good place to start is with the board chair. Let them know that you want to work closely with the board and would appreciate learning more about their roles, backgrounds, and specific areas of experience. Spend time with each board member individually, learn more about them, and get their input. So, you can better understand their needs and how and where you can leverage their expertise.
It’s particularly important to understand the domain experience of board members, as many bring skills and experience to their positions that oftentimes go overlooked. Understanding their experience can be particularly helpful when dealing with unsolicited board involvement in the operations of your business.
Roles, Responsibilities, and Expectations
Companies typically do a good job of defining the roles and responsibilities of almost every job in the company, with the exception of board members. You should expect this to be the case with any company you join as a CXO. Working with a board chair to help clarify roles, responsibilities, and expectations for Directors is a great step.
Most of the boards I’ve worked with welcomed the increased clarity around their roles and the expectations for their position. On occasion, you’ll find board members that start getting overly involved in the operations of the business. Most experienced board members have learned to balance their operating instincts with the need to focus on providing strategic input, guidance, and support, but there are always exceptions, and dealing with board interference in daily operations can be an issue. An email or a phone call from a board member to a VP in your company can seem innocuous but it can also be incredibly distracting.
Look, I get it. I sit on boards, too, and in some cases, I engage in the daily operations of the business. I try to do so, however, at the invitation of the CEO and in concert with the chair of the board. CXOs and their boards work best together when there are clear expectations on the roles, responsibilities, and level of involvement of the board in the ongoing operations of the business.
Risk Tolerance
One overlooked element in the relationship between CXOs and their boards is assessing individual and collective board members’ appetite for risk. In an era of increased scrutiny of and liability for boards, you will find some board members have become risk-averse. Openly discussing risk tolerance for new initiatives, annual budgets, competitive threats, and market shifts is essential today.
From there, then, setting clear milestones and risk mitigation steps is key. When in doubt, bring in outside expertise in assessing and managing risk. I wrote about “4 Steps for Managing Governance, Risk, and Compliance” for Acceleration Economy back in April, which detailed frameworks for risk management and mitigation that you can use.
When working directly with boards, I’ve found this three step framework to also be helpful:
- Lead with the “why”, then the “how.” CXOs often assume board members understand the incredible energy and resources major business initiatives require to be successful. CXOs should take a half-step back in their board communication to align on the “why” you’re pursuing or recommending a specific initiative and the market and competitive forces at play. With alignment on the mission, leaders can dive into the “how” and define the key steps on the specific initiatives to accelerate the company’s growth. This approach naturally creates clear milestones and progress metrics for board-CXO alignment and accountability.
- Show what success looks like. It’s important for CXOs to bring to life what a successful initiative that requires funding, like digital transformation, will look like. Bring in functional leaders to share successful examples, the positive impact on their day-to-day roles, and the short- and long-term impact on the business.
For example, a CMO can showcase an evolved go-to-market strategy to bring a digital subscription-based offering to existing customers. Another example is a CIO highlighting a cloud migration initiative to provide customer and partner access to self-serve applications and resources creating new revenue streams. These specific types of initiatives can be tracked against goals and the details shared along the journey to build confidence and buy-in. - Schedule board member check-ins. To get the best out of boards, it’s important to proactively ask for strategic input and involve board members where their core areas of expertise can add value. As a part of this process, check in with board members outside of scheduled board meetings, get their input, assure their buy-in, and look for additional areas where they can help. I’ve found checking in with board members ahead of meetings as well as after meetings can be helpful to assure you’re gathering the full range of input and that your communication to them is clear and well understood.
