Non-Monetary Compensation Part II: A Costly Missed Opportunity

by | Mar 10, 2015 | Board Savvy Transit CEO Blog Archive, Board-CEO Relationship

Walking into the authority’s boardroom to meet with the board chair, I was surprised to find her fuming.  Before I could even say “good morning,” she slammed the metro section of the daily paper down on the table, saying “Take a look at this.”  In a nutshell, a reporter on the metro beat had spent a couple of hours talking with the authority’s CEO about the agreement that the authority and local community college had entered into for the provision of bus service to students.  The piece was really laudatory, praising the authority’s CEO for leading the charge to expand service, diversify earned income, and help an important community institution.  It also made a big deal of the CEO’s staying personally involved in the negotiations rather than just delegating the initiative to one of his lieutenants..

“So what do you think?” the chair, a prominent attorney who’d headed the board for the past two years, asked.  I said something about how great it was to see the authority getting such good press and started to comment on how important a stakeholder the community college was when she interrupted and told me the back story that wasn’t in the article:  that she’d actually kicked off the process six months ago by hosting the college president and the authority’s CEO for lunch at a downtown club, where they explored opportunities for collaboration.  At this initial lunch, at the chair’s strong urging, the president agreed to have his chief operating officer represent the college in talks with the authority.  The chair also informed me that she’d stayed involved in the process at a high level, hosting two more lunches at which the president and CEO reviewed the specific terms in the agreement being negotiated.

Now I understood why the authority’s board chair was so steamed up.  The CEO hadn’t even invited her to the meeting with the reporter who wrote the piece.  And to add insult to injury, her name wasn’t even mentioned in the article.  She had every right to be offended, in my opinion (though I didn’t say this to her), and I know for a fact that the board chair-CEO working relationship was badly strained and never again as close as it had been before the article appeared.

In my last post, I talked about how board-savvy CEOs commonly use non-monetary compensation (such as public recognition) to cement the working relationship with their board chair.  This is a stunning example of failing to capitalize on the opportunity to compensate the chair, at a high cost in terms of a dangerously frayed relationship.  It certainly wasn’t intentional on the part of the CEO in this case – just an example of negligence due to the press of day-to-day operations.  My counsel:  be vigilant, and don’t miss any important opportunities to compensate your chair!


About the Author: Doug Eadie

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

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