5 Critical Keys Series:  #1  Make the Governing Function and Board a Top CEO Priority

by | Aug 25, 2023 | Articles

Over my forty-some years as “governance counsel” to public and nonprofit chief executives, I’ve made a practice of conducting an in-depth interview with my new CEO client early in every consulting engagement.  I always ask my new client to describe the nuts and bolts governing work her board does, what she sees as the preeminent issues related to board governing performance and to the board-CEO working relationship, and her view of the CEO’s role in the area of governance.  My objective is to understand how seriously my new client takes the governing function – where it ranks in the hierarchy of chief executive concerns – and how well-prepared my CEO client is to play a productive role in our upcoming effort to develop her board’s governing capacity and strengthen the working relationship with her board.

Generally speaking, a majority of my new CEO clients have in these interviews described a pretty narrowly circumscribed chief executive role in governance that, in my professional opinion, has limited their board’s governing performance and impeded development of a really close, positive, and productive partnership with their board. To take a real-life example, thumbing through folders of interview notes this past weekend, I came across my interview with a chief executive – in this case the superintendent of a large public school district in the Southeast in his third year at the helm – that is pretty typical.  My notes indicate that he saw governing as a we-they policy making process.  “We” – the superintendent and his executive team – play a support role in this process, supplying information and drafting documents for the board to review.  “They” – the board members – do the actual policy making:  reviewing, revising, and adopting the policies the CEO and executive team have supplied.  My notes indicate that this typical chief executive was very concerned that his board not “micro-manage” by getting too involved in shaping major policy documents such as the annual operating budget.   So, not surprisingly, this typical CEO had paid only scant attention to designing processes to engage board members in shaping the content of proposed budgets, strategic plans, and other major policy statements.  By the way, my one-on-one interviews with board members indicated a high level of frustration and dissatisfaction with the board’s essentially passive-reactive role in policy making.

Experience has taught me that this limited view of the chief executive’s role in the governing process – more often than not defensive, guarded, and more than a little negative – is a recipe for a ruptured board-CEO partnership and eventual departure of the CEO.  I’m pleased to report that a small but growing number of chief executives these days – superintendents of schools, transit general managers, and nonprofit executive directors – are making the governing function and the board-CEO partnership a top-tier priority.  Indeed, a new model of chief executive leadership in the governing arena has emerged and is already resulting in more solid board-CEO working relationships.  These new-breed chief executives:  see themselves as active partners with their boards in the governing process; take explicit accountability for development of their board’s governing capacity; become real masters of the governing game, understanding the nitty-gritty details involved in governing and keeping up with developments in the rapidly changing field of public/nonprofit governing; and devote a large dollop of their prime CEO time to hands-on engagement in governance matters.

The “we-they” syndrome is on the wane  – albeit slowly – among public/nonprofit chief executives  these days in the governing realm, apparently because it’s increasingly seen as working against a solid board-CEO working relationship.  I certainly concur with this judgment.  Experience has taught me that the CEOs who are most successful at building productive and durable partnerships with their boards, see themselves, in effect, as occupying  a hybrid position:  part top executive officer and part board member. This is a relatively new mindset among CEOs.  Of course, these board-savvy CEOs don’t claim to be legal, voting members of the boards they’re working with.  Rather, they make a serious effort to put themselves in the place of board members, aspiring to see issues and concerns from board members’ perspectives and working hand-in-hand with board members in addressing important issues.  As a transit authority general manager I’m working with observed in a recent coaching session, “I’ve got to think like board members if partnering with them is going to work.”

The board-savviest chief executives I’ve worked with – the ones who are most successful in building partnerships with their governing bodies – understand two critical facts of life in the public/nonprofit governing business.  First, boards are not self-developing governing bodies. Board members tend to have neither the time nor the expertise to take the lead in building their boards’ governing capacity – updating their boards’ governing role, structure, and processes.  So if the CEO doesn’t spearhead systematic board capability building, this important job won’t get done – at least not well.  Second, these board-savvy CEOs understand that under-developed boards make for unreliable partners.  Boards that fall significantly short of their governing potential inevitably consist of unsatisfied and frustrated members, who more often than not, in my experience, hold the CEO accountable for their lackluster governing performance.  In response to these facts of governing life, a small but growing number of CEOs are investing considerable time and energy in designing and executing board capacity building initiatives.  For example, the CEO of a local nonprofit economic development corporation I worked with three years ago has put in place an annual board development retreat aimed at identifying opportunities to strengthen board governing performance and to fashion strategies to capitalize on these opportunities.  She takes responsibility for putting together the detailed agenda and securing the retreat facilitator, working closely with her board’s governance committee.

The chief executives who take seriously partnering with their board and helping their board realize its tremendous governing potential have no choice but to become masters of the governing game.  Easier said than done, I’m sorry to say, because public/nonprofit governance is far from a fully developed field and is rapidly evolving. Not only is there no consensus on core values and best practices in the governing realm, the field, such as it is, is filled with dangerous erroneous assumptions that can get the CEO in trouble with his board.  Here’s a real doozy:  the erroneous notion that board standing committees invite micro-management (On the contrary, they deter micro-management and help board members focus on the big questions).  A growing number of CEOs are accordingly launching continuous governance education strategies for themselves to keep up with advances in the field.  For example, the superintendent of a mid-size suburban school district I worked with recently has assigned his executive assistant to build and keep updated a library in his office of governance books and periodicals and to identify governance workshops being offered at state and national conferences that the superintendent might benefit from, among other steps.

Finally, although it goes without saying, I’ll say it anyway:  CEOs – be they transit authority general managers, superintendents of schools, or the heads of nonprofit corporations – cannot expect to become masters of the governing business and to cement productive, enduring partnerships with their board unless they commit a significant dollop of prime, hands-on CEO time to the governance function.  Having observed hundreds of truly board-savvy CEOs in action over the years, I can say with some assurance that 25 percent of a CEO’s time at a minimum is required to succeed in the governing game, running the  gamut from the very simple, such as meeting with every board member one-on-one quarterly, to the very complex, such as designing a process for engaging board members in a meaningful fashion in shaping the annual budget document.

About the Author: Doug Eadie

President & CEO of Doug Eadie & Company, Inc., Doug Eadie assists CEOs in building rock solid partnerships with their boards.

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