Corporate leaders share their experiences guiding CEOs through crisis.
The Character of the Corporation forum drew some of the most influential corporate directors and thought leaders in the country. The event presented the opportunity for attendees to share with their peers lessons learned around the topic of the CEO/board relationship and how it changed in 2020 and to share their views on whether the traditional “noses in, fingers out” policy will return after current crises are resolved.
The roundtables were convened under Chatham House rules. No directors or companies are named here, but the following reflects key takeaways from participating board members.
Has your board's relationship with the CEO and senior leaders been more active in 2020? Do you think the line is fuzzier between the board and management now?
“The fuzziness, I think, has been appreciated,” one participant said. “At the end of the day, both the board and management are going to be assessed on their performance. We want to be on the same side of the argument. I think [management] is grateful they are not in this by themselves.”
One director, a woman of color, said the crises of 2020 made her feel closer to the CEO and her fellow board members. She said a CEO reached out to her to have a frank and welcome discussion about race, equity and social justice.
Directors also noted that a higher frequency of meetings led to shorter sessions that were more efficient and allowed for a deeper dive into information that was provided ahead of the meeting.
How long do you think directors should stay in such close contact with senior management? Or is this closer relationship a permanent change?
Opinions were mixed here. Some directors believe engagement accelerated between the board and management for specific reasons — the pandemic, social justice issues, even a CEO onboarding — and that meetings will be far less frequent as crises settle in 2021.
Others think the contact between the board and senior management will remain frequent. “Travel scheduling and time is no longer an obstacle because we can meet virtually,” one participant said. “Arranging a five-minute meeting is no longer a problem. We can have those meetings whenever we need to.”
However, with this increased access to management, protocols and rules of engagement should guide conversations between directors and CEOs.
Should boards get involved further and deeper in the organization? Has the “new normal” brought about a permanent change in the way boards guide the CEO and senior management? Or will we return to “noses in, fingers out”?
Participants said boards continue to be responsible for the corporation's integrity. Integrity failures can cost stakeholders and owners billions of dollars.
The bottom line is that the board's role is to advise management. Board members can guide and advise, but they should not “do.” The CEO must execute, but the board can/should/will ask for more information and pose more difficult questions now than ever before.