Author's Name: Mark Schultz
Date: Mon 12 Oct 2015

The Board – CEO relationship: what underpins an effective relationship?

For the governance of an organisation to be truly effective and deliver the best possible results for all stakeholders, it is critical that the Board in general and the Chairman in particular have a relationship with the Chief Executive that is based on the following fundamental components:

Mutual respect, incorporating an open and honest approach to all matters: both parties are appointed to work in the best interests of the organisation at all times; it is not a competition, rather it should be a collaborative relationship that enables each to undertake their particular role with the knowledge and comfort that mutual support and regard is present at all times;

Clearly defined and articulated respective roles for the CEO, the Chair and the Board itself: confusion around accountability (i.e. for what and to whom) is a sure way to diminish the effectiveness of an organisation. Documentation and communication will ensure valuable resources are not wasted “doing business with yourself!”

An agreed approach to ongoing feedback, both formal and informal: an open feedback system, both formal (annual performance review) and informal (monthly meetings with the Chairman) will go a long way to ensure alignment between strategy and implementation and create the right culture for all to work within; and

No secrets, no surprises: no one wants to find out about their organisation/business from the “front pages of the local paper” or a surprise agenda item at a board meeting. Relationships can be easily eroded through poor communication and generally difficult to resurrect once trust is lost.

In summary, good governance demands an effective relationship between the Board, Chair and Chief Executive. It should not be taken for granted and the expectations are both ways - make it part of your culture and your organisation will derive many positive benefits.


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