Tending To Your Preeminent Stakeholder

This article originally appeared at another Doug Eadie & Company Blog: www.boardsavvytransitceo.com.

One of the breakout groups at a board-CEO/GM retreat I recently facilitated had a great time going through what I call the “stakeholder relationship maintenance” exercise. The six breakout group participants, who were led by the chair of the board’s external/stakeholder relations committee, first made a list of all of the authority’s important stakeholders. By the way, for purposes of the exercise, we defined a “stakeholder” as any formal organization or group external to the authority with which it made sense to build and maintain a relationship because of the stakes involved – such as money and political support. You won’t be surprised to learn that the list was really long – local government bodies, educational institutions, civic associations, various media, the state DOT, the governor’s office, to name just a few of the 30+ stakeholders they identified. The breakout group then did what I call a “quid-pro-quo analysis” for each of what appeared to be the ten highest-stakes relationships: identifying what the authority needs/wants from the particular relationship and what the breakout group participants thought the stakeholder was likely to need/want in return in order to keep the relationship in balance and healthy.

Over the years I’ve learned that really board-savvy CEOs also pay close attention to stakeholder relationships that they must spend significant time of their own maintaining, because the relationships are critical to achieving their own CEO-specific leadership goals. At the very top of every one of these CEO’s lists? Her board of directors, of course – there’s no close second. I’ve sat with a number of CEOs thinking aloud about this preeminent stakeholder relationship, and I can say from experience that the needs/wants on the CEO’s side of the relationship equation are pretty obvious – timely and sound board decision-making; public support for the CEO; backing CEO initiatives; regular feedback on CEO performance; etc.

But the other side of the equation – the board’s needs/wants – isn’t at all obvious, and board-savvy CEOs know that they need to make a real effort to identify what board members need/want from their relationship with the CEO. The most effective approach, in my experience, is for a committee of the board, such as governance or board operations, to annually spend a couple of hours with the CEO defining the what the board expects from the CEO and then reviewing the list with the whole board. The point is, if the CEO doesn’t know – in detail – what the board’s expectations are, maintaining a close, healthy relationship with this preeminent stakeholder is will be the impossible dream. How can you fashion a strategy to meet expectations that you don’t even know? By the way, I’m not talking about your authority’s overall performance targets, but, rather, expectations about CEO behavior and performance specifically, for example: keeping board members in the know so they aren’t caught off guard in public; making sure board members are actively engaged in shaping important governing decisions rather than just reacting to staff documentation; providing board members with public recognition; making board meetings more interesting and enjoyable, by, for example, holding board meetings in different locations; providing board members with opportunities to get to know senior executives outside of the formal board meeting; and the like.

Bottom line: The board-CEO working relationship is much more likely to be close, positive and productive if the CEO treats the board as her preeminent stakeholder.