A few months ago, I used this forum to discuss the continuing decline of public company CEO’s tenure. At that time, the average tenure was less than five years.
While there are a number of factors driving this decline, one of the most important is the CEO’s relationship with the company’s board of directors. This relationship between the CEO and board not only sets the tone, but dramatically impacts how the business operates and performs.
Like every other aspect of business, effective and proactive communications is the key to truly effective CEO and board relations. Having spent more than forty years working with and observing CEOs and C-Suite executives interact with their boards, I have formed some defining opinions on what constitutes effective communication and drives successful relationships.
Stick to simple basics
The essential element in the following recommendations is to “keep it simple.” Most boards consist of directors with varying levels of knowledge which means all communication needs to be transparent, concise, and candidly presented.
- Don’t overwhelm with data
The board’s role is to strategically direct the company’s management to ensure success, profitability, and growth in shareholder value. Overwhelming them with data can put directors in the weeds and off the strategic path.
- Focus communication on the issues facing the company
Messages should be kept short, direct, and to the point. Board members need to receive clear, concise information regarding issues facing management and the company. Be prepared to provide a deep dive for those who may request more information, but probe into their specific area of concern or interest to keep the conversation focused. This ensures the directors have the quality information they need to make timely and effective decisions.
- Deliver status updates about company actions and activities
High level reports regarding company initiatives invite director questions. The reports eliminate the need for the CEO to anticipate every question and allow the board to understand project status. It also enables the CEO to more easily address specific questions and the board to offer strategic recommendations and solutions.
- Communicate one-on-one
CEOs need to go out of their way to directly connect with board members. The idea is to seek out those directors who have deeper experiences in specific business areas. Building relationships and gaining valuable information is the goal.
- Seek subject matter expert support
Subject matter experts (SMEs) can provide valuable communications as they possess significant experience in a specific area. SMEs can support the CEO in preparing detailed presentations or explaining a new business opportunity or process to the board.
- No surprises
The number one mistake CEOs can make is surprising the board with material information or not providing the full background on an issue or contentious situation.
Effective communication between the CEO and the board is vital to the company’s health and success. Good communication is a major factor in business success. After all, poor communication and dysfunctional CEO-Board relationships is a primary reason for CEOs being replaced. Take a moment to evaluate how your current strategy is performing and how you can enhance it with the tips above. Committing to these changes is a direct step towards solidifying your working relationship with your board.