Our Point of View

You’ve Recruited a Great CEO… Now What?

 

The crucial role the board plays in hiring a new CEO is indisputable; ensuring capable leadership, the lifeblood of any organization, is one of the board’s core duties. But too many boards believe their responsibility ends when the new CEO’s job begins, when it is actually only the end of phase one. Equally important is the recognition of what the board needs to focus on during the CEO’s initial tenure, and setting the tone for a cordial and productive relationship between the CEO and the board going forward.

How do boards know what sort of process makes sense when starting with a new CEO? Time is of the essence, and there is little room for error these days. Many boards find it useful – and reassuring – to seek a broad perspective on best governance practices across industries as well as in companies similar to their own.

 

The Value of Undertaking a Board Assessment

 

There are many reasons to undertake a board assessment, but in our experience, the best reason is to create a valuable tool for ensuring a well-functioning board that can be used to track year-over-year performance and generate productive discussion or action.  Taking a step back to evaluate what the board ideally wants to gain from the assessment and how it might leverage the results will guide you toward the right approach.  Much like anything worthwhile in creating organizational excellence, the thought, planning and effort your board invests in an assessment is directly related to the value that emerges from it.  Our best-thinking on board assessments introduces you to the best-practices and potential pitfalls involved in the process, and perspectives from some of our clients add further insight into how to get the most out of this facet of the board’s important work.

 

The Board’s Role in Strategic Planning: Striking the Right Balance

 

Strategic planning is clearly recognized as a crucial responsibility of boards. In the 2010 NACD Annual Survey of Public Company Governance, strategic planning and oversight was by far the top priority for boards, as noted by more than two-thirds of respondents. Furthermore, it is essential that boards be engaged in the strategic planning process; it is the core of the very raison d’être of the board. Strategy is the rudder that steers the ship, and the board must have a hand on the rudder by providing critical input into the strategic planning process.

Boards may be uncertain about what the appropriate extent and nature of their involvement in strategic planning should be. They are often wary of encroaching on management’s territory. But there is no need to fear overstepping boundaries as a board member or to hang back. By clarifying roles and responsibilities in the process, the appropriate contribution of the board versus that of the CEO and senior management can easily be delineated. As a team they can plan, implement, and continue to refresh or reframe a successful strategy.