Elephants in the Boardroom
The challenges which exist between the CEO and the Board can be easily seen - and overcome - if you know what to watch for.
By Richard A. Moran, Venrock Associates
Apr. 16, 2007
An elephant almost always joins the festivities when the CEO and the Board gather. This is not an elephant that stomps around and trumpets trouble. It's a pachyderm who is very subtle but big enough to complicate the dynamics in the relationship between a CEO and the Board of Directors.
The "elephants" are the big issues that can put a divide between the CEO and the Board if they are not resolved. They are often so big that everyone sees them, but no one wants to address them. But sometimes they can be so large that no one even sees them.
The tricky relationship between management and the Board is fueled by business issues, style, decision making power, and all the stakeholders involved. The rigors of corporate governance compound the dynamic with committee charters, proper policies and procedures, independent directors and plenty of counsel. Compliance cloned the elephant in the room into a herd.
By recognizing the common challenges in management-Board relations, companies can follow three basic principles to overcome most of them and greatly improve the productivity of the relationship.
Tracking the Elephants
Sometimes I feel like I am wearing special glasses that allow me to see elephants where no one else can. If I can see them, every CEO and Board member should be able to see them too.
To see the elephants in your boardroom you don't need special glasses, you just need to be honest and ask the hard questions. Here are some of the questions to ask yourself to see if there are elephants thundering into the dynamics between the CEO and the Board.
The "elephants" are the big issues that can put a divide between the CEO and the Board if they are not resolved. They are often so big that everyone sees them, but no one wants to address them. But sometimes they can be so large that no one even sees them.
The tricky relationship between management and the Board is fueled by business issues, style, decision making power, and all the stakeholders involved. The rigors of corporate governance compound the dynamic with committee charters, proper policies and procedures, independent directors and plenty of counsel. Compliance cloned the elephant in the room into a herd.
By recognizing the common challenges in management-Board relations, companies can follow three basic principles to overcome most of them and greatly improve the productivity of the relationship.
Tracking the Elephants
Sometimes I feel like I am wearing special glasses that allow me to see elephants where no one else can. If I can see them, every CEO and Board member should be able to see them too.
To see the elephants in your boardroom you don't need special glasses, you just need to be honest and ask the hard questions. Here are some of the questions to ask yourself to see if there are elephants thundering into the dynamics between the CEO and the Board.
- Are there too many people on the Board and no one is sure who should go or how?
- Is the CEO under-performing but thinks he/she is doing a good job?
- Is there that one "special" person that just can't get along with the CEO?
- Does the founder or former executive on the Board create issues because "the old days" were better?
