Archive for July, 2010

>The Managing Up Kit part 3 – are you on the board as well as being CEO?

>

It’s not unusual for the CEO also to be a member of the board; that’s where the title “managing director” came from. Being on the board, as well as being CEO, brings an added layer of complexity which is worth your while thinking, and talking, about.

The CEO “reports” to the board in a line management sense, and is certainly accountable to the board for the performance and success of the organisation. But there are no grades of directorship. Every director has the same duties, responsibilities and liabilities under the law – subject only to their obligation to employ their individual skills and expertise in a way that any similarly skilled person would reasonably do so as a director. In their capacity as director, the CEO is a brother or sister in liability with the rest of the board.

This dual nature of the CEO’s role can cause some difficulty however, particularly for the CEO’s participation in board meetings. I think the key to successfully managing the duality is to accept it as inevitable, and to be clear which hat you are wearing – CEO or director – at any given stage in the board meeting. In presenting reports to the board, or discussing the organisation’s performance, you are unavoidably wearing the CEO hat, and should expect the board to ask searching questions or make incisive comments – in other words not treat you as one of them. When the board is making important decisions or approving significant transactions, you are entitled to put on your director hat, and exercise your rights as director on an equal footing with the rest of the board.

This is sometimes a hard thing for the board to recognise. It is an issue which is worth a specific discussion with at least the chair, to ensure that the rest of the board should expect there will be times when you will not be answering to them, but standing side by side with them.

In my experience this is not a card to be over-played, and tactically it is usually preferable to put on your director hat only when the context really requires it. This may be when you feel that the board may not be heading in the right direction, or when consensus is not appearing likely and a vote may be needed. The power of your director’s hat is probably inversely proportional to the number of time you explicitly put it on.

One thing you should bear in mind about your position on the board is the information imbalance. As CEO you will be aware in great depth of the organisation’s circumstances, performance and prospects. Non-executive directors touch the organisation much less frequently (see a previous post on “Managing the board”) so be conscious when you do wear the director hat that you will have information the rest of the board does not, and act accordingly.

 

Advertisements

>The Managing-Up Kit part 2 – Embracing the Power of the First Draft

>

It is usually unrealistic to expect that people in non-executive positions will have the time (or possibly the experience or know-how) to be preparing important material that impacts on you personally or on the organisation you lead. What senior or non-executive people can contribute much more practically is to review drafts. That has likely been a large part of their more recent lives. Giving a chair or a director a blank sheet of paper is mostly a recipe for disappointment, or an invitation to be given something back you don’t want or won’t like.

Some of the things you should consider doing as a first draft, if you haven’t got them in place already, are:

  • Your job description – it’s likely that the only one which exists is the one prepared by the recruitment agency or the headhunter; suitable for that process but not so useful for explaining what you will do on a day-to-day, or quarterly, or annual basis. Have a go at writing down what you do – a high level description including the purpose of your job; then your responsibilities; then the things you are held accountable for; and then functional things. Think about how it can be expressed in terms of deliverables. Then share it with the chair. It will be interesting to get their perspective on what they think your job is. They can discuss, comment, amend, delete – but it is very unlikely that they will scrap it and re-write it from scratch.
  • Your own performance goals and KPIs – there will inevitably be a negotiation process with the chair and even the board in coming to the final version. In doing your first draft, it’s helpful for both you and the person doing your review if you can be as specific as possible in setting up measures, as tangible as possible , and as objective as you can make them. Some goals may be more difficult to nail down as numbers, particularly around the assessment of your leadership. This may be a place to use 360 degree feedback or staff engagement scores. When performance review time comes, you’ll find you will be managing up more effectively, and be having a more fruitful conversation, with a good framework to hang the conversation on.
  • The board meeting agenda – The way the board meeting runs, and therefore the way the board and management interact, are both heavily influenced by the board meeting’s agenda. Sadly, the construction of the agenda often ends up in a vacuum, or defaults to the company secretary if there is one. The final authority over the agenda rests with the chair. For the reasons discussed in “Managing the board”, they are unlikely to draft it personally. There is usually a priceless opportunity available to produce a first draft of the board agenda, which is more likely to be appreciated by the chair than to be seen as presumptuous. There will invariably be some adjustment to your draft, but you will have taken an important step in influencing the context, and thus the outcomes, of the board meeting.



%d bloggers like this: