The relationship between the CEO and members of the board is one that is crucial to an organisation’s impact and ability to succeed. It is important for both parties to understand that although they are on the same team and have to work alongside each other, they have different roles to play. Having a clear idea of what the role and expectations are, will help establish a long lasting relationship between the CEO and board based on mutual understanding and respect.
Get to Know Each Other
A great way to initiate a good working relationship between the CEO and board, is to find opportunities to meet and converse outside work contexts. Make an attempt to learn more about each individual on the board, as they may have different levels of expertise and interests. Having informal chats is also helpful when bouncing new ideas off each other, even if it is something that is related to work issues. If the board members know the CEO better, they will trust their decisions more and believe that the person has the organisations best interests at heart. According to a recent study in the Journal of Financial Economics, board members who share a good relationship with the CEO, are likely to pay them more and less likely to fire them following a poor performance.
Maintain Regular Communication
The CEO has to regularly update the board with developments in the organisation, based on degree of importance. The CEO is accountable to the board, so finding a good balance regarding how much detail is necessary, is really valuable. Once communication and reporting back to the board is a seamless process, the CEO can shift the focus to developing networks that are beneficial to the organisation’s future development and execution of the business strategy.
Develop Relevant Strategic Plans & Policies Together
The board and CEO need to work with each other to create and fine-tune organisational strategy and policies that are up-to-date and relevant for its present needs. The board should take inputs from the CEO regarding the strategic plan and any kind of policy gaps that exist in the organisation. It is up to the CEO to manage and implement the strategy, and organisational policies that have been established by the board members. The CEO is vital and centrally placed, when it comes to providing suggestions as to what is required and which strategic initiative and policies to channel energies in.
The CEO is usually in a position to wield more power on a daily and weekly basis in the organisation. There can emerge situations where the CEO tries to circumvent the board decision making process – this is strongly advised against. The board members and CEO must maintain transparency so that ethics or mistrust do not become an issue in future transactions. The board must also be fair and keep the CEO informed so the person does not feel like they are left behind in critical organisational decisions.
It’s Always Better Not to Assume
Assuming can be dangerous for both the CEO and the board members. The CEO can assume that the board will be fine with quick decision making on a matter, because it has been mentioned to one or two of the board members. Going forward, this can become a problem if board members hear of important information second-hand. It is easy enough to video conference or do a conference call to keep the board members informed of both short term and long term developments. Even when a discussion or conference is scheduled with external parties, the CEO can make things easier by sending briefs or points to keep in mind for the board members to stay prepared.
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