Winning Over the Boardroom: The Unique Relationship Between CEO and the Board

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The CEO of a company often must bear the burden of public opinion for the successes and failures of the company. However, the board of directors also wields a strong influence over a business’s actions. Therefore, it is essential that the board of directors and the CEO have a solid relationship.

The Ideal Board-CEO Relationship

In a perfect situation, the board and the CEO cooperate in order to promote the best interests of the company. The Houston Chronicle gave an overview of the respective roles of both the CEO and the board. The CEO manages the company’s executive team and pursues goals that are meant to drive the company forward, while the board sets those goals and gives counsel to the CEO. The board must also ask tough questions that dig into the deepest details of how a business operates.

The board and the CEO may disagree at times, but in ideal circumstances, these disagreements help to build the company up rather than tear it down.

Tips for Managing the Board-CEO Relationship

Whether you are pursuing your executive MBA, or you’ve been in a C-suite position for some time, it might benefit you to learn some techniques for fortifying the board-CEO relationship.

Russel Reynolds Associates outlined some of the relationship responsibilities of the CEO as they related to the board of directors:

 

  • Establish informal relationships with board members. Casual conversations with board members outside of formal meetings could help you to establish an open professional environment.

 

 

  • Willingly seek advice from board members. Rather than have the attitude that you should make decisions alone, proactively seek out input from board members. This could prevent resentment later on if something goes wrong.

 

 

  • Be open to different opinions. The board likely has people with a diverse range of skills and expertise. Taking advantage of this diversity can complement your own knowledge and lead to a stronger company.

 

Wendy Foster, CEO of a nonprofit in Massachusetts, extols the value of not taking disagreements with the board personally. Sometimes the disagreement may have little or nothing to do with your actions as the CEO.

Handling Disagreements

The Harvard Business Review interviewed several CEOs to discover their views on the members of their board of directors. When one company was discussing a merger, a board member expressed concerns on how the merge might affect the company’s public image. The CEO had a different view, stating, “The risk appetite is out of balance. We’re wasting time on image topics when we need that time to debate business issues.”

When issues like the one mentioned above arise, CEOs should strive to see the board’s point of view and vice versa. Communicate clearly with the chair of the board, and aim to reach a compromise. Every situation is different, but relying on the principles of strong communication and conflict resolution may help you to avoid a worst-case scenario.

The relationship between a company’s board of directors and its CEO can set the tone for how the business performs. By seeking to strengthen this relationship, CEOs can solidify their position and avoid the stress that comes with tension at the top of a company. To learn more about C-Suite relationships, visit Washington State University online.

Resources:

http://work.chron.com/ceo-vs-board-directors-25433.html

http://www.russellreynolds.com/insights/thought-leadership/essential-elements-of-an-effective-ceo-board-relationship

http://www.psdnetwork.com/wendy-foster-on-navigating-the-relationship-between-the-ceo-and-the-board-inside-the-c-suite-mindset/

http://www.businessinsider.com/apple-had-no-choice-with-steve-jobs-2013-9

http://www.n2growth.com/blog/managing-board-relations/

https://hbr.org/2013/04/what-ceos-really-think-of-their-boards