Archive for August, 2010

>The Managing Up Kit part 6 – Board access to management

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One of the most contentious issues in board – management relations is the degree of access which individual directors may have to the organisation’s management team. The most useful way to regulate that access is to have a protocol approved by the board on the circumstances in which directors may interact with management.

There are a couple of ways in which such a protocol can be developed. You may want to raise it with the chair and include (with their consent) a discussion at a board meeting in which a protocol may be hammered out and articulated. Or you may want to try the power of the first draft and prepare something for the consideration of the chair initially and then the board. The form and content of the protocol need to be organisation-specific, but here is an example of what a typical protocol might look like.

 

Protocol for board access to management

  • Directors may have access to the CEO at any time and for any reasonable purpose. The CEO should have access to directors for their guidance and counsel in relation to areas of particular know-how, experience or skills which the director may have.
  • Directors may have access to the members of the senior management team to seek information or clarification ahead of a meeting about matters covered in the board papers.
  • Directors may give constructive feedback directly to the CEO about the CEO’s performance in relation to specific matters.
  • Before giving any constructive or negative feedback to a senior executive about their performance, or that of their staff, directors should consult with the CEO and. if the CEO requests, allow the feedback to be passed on by the CEO if that is the CEO’s preference.
  • However, directors should feel free at any time to give positive feedback or reinforcement to executives (as long as it is not “Well done, BUT….”)
  • When giving constructive feedback to the CEO or executives, directors should follow accepted practice and ensure that the feedback is given with an appropriate degree of respect, and is timely, prompt, specific and supportive of learning.
  • Directors should not seek information from or access to staff outside the senior executive team without prior consultation with the CEO, who may in their discretion propose an alternative course.
  • Directors are encouraged to provide counsel and mentoring to executives, after consultation with the CEO and the chair on the most appropriate way to do so.
  • When dealing with each other, directors, the CEO and executives should act and communicate in a way which is respectful, open, transparent, and for the purposes of the business of the organisation, or the personal development of the CEO or executives.
  • Directors should be aware of the potential for appearance of preferential treatment about the organisation’s products or services when dealing with management – obtaining things for free or at deeply discounted rates.

>The Managing Up Kit part 5 – Be clear about what you want from the board

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A frequent source of confusion, and therefore of ineffectiveness, between board and management is a lack of clarity about what the board is actually being asked to do at a board meeting. There are a number of potential outcomes when a matter is considered by the board. An issue may be for the board’s information, such as a survey of the external competitive environment. It may be for noting, such as a risk management report, so the board can show they have considered relevant prudential matters and discharged their duties. It may be for a decision in principle, so that further work can be done to focus more sharply the final decision. Or it may be a request for a formal resolution, so that a transaction or course of action can be undertaken.

If you are not sure, and explicit, about what you are asking the board to do, neither will they be. You may end up with something unhelpful, or delay-inducing. Take the time to articulate exactly what you want from the board. Even if you don’t get it, you will have the board in the right territory, and you will give them the opportunity to delineate what they want done before they will agree to what you are seeking.

Do you want the board:

  • Simply to be informed about something
  • To note, for their benefit or yours, some action or state of affairs
  • To agree to something in principle, and also to agree on what else needs to be done before any final approval is given by them
  • To decide, and authorise formal actions to be taken
  • To decide, with conditions precedent before any action is taken, but still granting authority to proceed without further board involvement (a very useful mechanism for CEOs for getting on with things)?

 

Whatever it is, make sure you tell them clearly. State what outcome you want in any board paper or board report; include it briefly in a separate column in your first draft agenda (eg “note”, “agree in principle”, “resolve”), to help the chair support you in getting what you need.

Finally, be prepared for the eventuality that you may actually get everything you asked for. A common follow-on from the board in such circumstances is “What else do you need?” or “What will be the next step after that?”. Not being able to articulate that next stage may mean you miss out on an opportunity that might not come again soon.

>The Managing Up Kit part 4 – Taking one for the team

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One of the inevitable parts of being a leader is taking the responsibility for what your team members do. They won’t always produce the best results – none of us do. Sometimes there will be serious mistakes. When those happen, and are being explained to or reviewed by the board, probably the least successful tactic a CEO can employ is to focus the blame on the executive or team member who has made the mistake. I’ve watched it happen often in board rooms. Mostly it looks obvious and undignified. The same result occurs when one executive tries to pin an unfortunate consequence on another executive, in front of the board.

When mistakes happen, usually the most effective way to deal with them is just to take the position with the board that “it happened on my watch, and I take responsibility for that”. To the extent that the circumstances allow, the board will see where actual blame lies. The CEO will appear much more statesmanlike by not pointing the finger at someone else.

That’s not to say that the mistake or poor performance should not be dealt with appropriately or on its own merits. Just don’t do it in front of the board.



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