I have been talking a lot this summer about CEOs and boards. With so many CEO transitions underway and with 2020 being a natural boundary line between one strategic planning cycle and another, I thought I would pull together a compilation of what I’ve been saying in one spot.

Who Brings the Vision?

I could simply end this paragraph by saying; “you do.” But there is more to it than that and more than one kind of CEO. I’m not going to go into all the “types” that can become President. Suffice it to say that one of the major personality/leadership style houses says that ALL personality types have been President of the United States and I believe business is no less diverse on that count. Cleary, some people come to the CEO seat with a clear vision for the business. Maybe they started the business and it has always been their vision driving. If that’s you, then proceed with your vision, but get some outside opinions on it to make it stronger in the areas that are not your areas of strength.

If on the other hand, you are an excellent administrator or operator and you don’t have a vision… You need to get one. Business by committee doesn’t work. It kills focus and leads to distraction and dilution of effort. So where do you get one if you don’t have a vision? At first, you can simply take the organization’s current direction and adopt it. But eventually, you will need to think critically about what the business might be able to achieve and where it can shine. I suggest starting with Collin’s Good To Great (G2G) and the circles that lead to the hedgehog concept. This is a pretty strong framework. If you can’t draft your own vision, convene a SMALL group of great thinkers (not a large group of all thinkers) and walk them through the process of taking into account the outside uncontrollable factors that operate in your sphere and develop your own G2G circles.

It’s a good idea to call on the board, or a useful subset, to assist with this, but don’t turn it over to them. A vision needs to be coherent and focused. It is difficult to develop that through a committee. You wind up with either a platypus that looks like it was designed by committee, or the input of a single strong mind on the committee.

Focus

Speaking of focusing the organization on a vision, you need to focus yourself on the job of the CEO. Regardless of where you came from prior to sitting in the CEO’s seat, once you are sitting in that seat all the other jobs need to be owned by someone else. No wearing two (or more) hats. At GE they used to say job one is training your replacement. And so it is here, or hiring your replacement. The old job is one that you are super competent at so it will feel normal and frankly, good to do that job. The new job is unfamiliar, unforgiving and challenging so at times it won’t feel good. (That’s normal). So don’t let yourself get sucked into doing your old job for the new gal. Let her shine in that role so you can focus and shine in your new role.

Who’s In Charge?

A CEO I have lunch with routinely used a phrase that I love to describe the role of the board. “They serve at the pleasure of the President.” It comes from the White House, of course, meaning “you can have my resignation anytime.” His point is that the board is there to serve the business and the CEO in making strategy for the business. He and I share the opinion that it is inappropriate for the board to wade into management and get involved in the business.

This approach works in the vast majority of businesses where the board is an advisory board. Examples include actual advisory boards, boards of ESOPs and outside boards. Where this can require finesse however, is when the board actually owns the company. This can be the case in public companies where large shareholders sit on the board or in companies where control has passed but ownership has not as is sometimes the case when an owner “retires to the board.” Even in these cases, the board still serves the CEO, however, the reality is the power resides with the board.

In many boards there is a clause that allows for the removal of the CEO for malfeasance etc. This is an entirely appropriate control. It also has the function, at least on most boards, of making CEO turnover somewhat less likely to happen. If the only option is the nuclear option it is less likely to be exercised.

Nema Washi

Managing the board can require finesse. I actually don’t like the phrase “managing the board” because it implies the board is in the way or must be managed. I’ll speak to what the board has to offer in a moment, but first I want to address “managing the board” because I think it makes some of you uncomfortable. If the board is not managing the business, what do they do? They provide a (preferably) independent, objective opinion regarding strategic decisions and company performance at the macro not micro level.

Board charters and company bylaws come in to play here and they should rule, but in dealing with advisory boards, I prefer to have the CEO present a summary of business performance and strategic decisions to the board for discussion rather than decision on most issues. Of course, issues of absolute importance like the sale of the business or discontinuation of some or all of operations should be put to a vote.

For all issues, I am a fan of the Japanese concept of Nema Washi. Nema Washi is the practice of laying the foundation prior to a major decision or meeting. As practiced in my Japanese client, it means socializing a decision and getting feedback on it one-on-one prior to sitting down in a large meeting, like a board meeting, and putting it to a vote. This practice can aid the CEO in avoiding rancorous or contentious board meetings where board members are surprised by the content of the meeting or the intended direction of the CEO.

What’s In It For You?

I assume if you are reading this you understand the value of advice from an experienced source. And that’s what the board promises. A well-structured board offers an opportunity, once a quarter or so to solicit input from engaged, thoughtful, experienced leaders or subject matter experts on the tricky, complicated or momentous decisions you face as a CEO.

Of course, not all board situations are this idyllic, some boards aren’t well populated with relevant members, some are poorly chartered, and some seem to have a culture of fault finding. But by-and-large I have found that with proper respect and coaching nearly all boards can provide perspective beyond your own that can increase the likelihood of successful decision making.

To get the most out of a board, present the strategic plan for review and comment. Discuss major decisions before they are set in stone. And review business results at a high level. Each board meeting should have a typical agenda with room to adjust for unusual business situations (like a pandemic). I recommend that the board receive the board packet one week before meeting virtually or physically. It should be the expectation that the board will have read the material and be prepared to discuss it at the meeting.

Good minutes should be taken so that you can harvest their best ideas and respond in full to their requests in a timely manner.

Call to Action

Here are five steps you can take to get the most of a board:

If you don’t have a board, form an advisory board.
Work on the board culture and expectations if their focus needs to be adjusted. It should be balanced, not meddling, but also not aloof and detached.
Practice Nema Washi prior to board meetings to show respect and to ensure meetings go smoothly.
Present results and decisions for comment normally and reserve votes for major events (subject to the specific of the board charter and company by laws).
Remember, the board serves at the pleasure of the President and the business. Treat them well and they will be an invaluable resource for you.