MT Expert's Ten Top Tips: How to strengthen relations with your board

Communication is the key to ensuring that relations between the CEO and the board remain peachy.

by MT Staff
Last Updated: 19 Aug 2013
It goes without saying that for a CEO, having good relationships with the board is vital, especially in an era when countless studies have shown that trust is at an all-time low. When it comes to the board's effectiveness, communication is the key. 'Keep it transparent and trustworthy', says Stephen Miles, vice chairman of leadership consulting at Heidrick & Struggles, and his co-author Tom Wajnert. Here are their ten top tips for keeping that all-important relationship harmonious...

1. Make communication your number one priority
Nothing is more vital in the role of a CEO than how you communicate with your board. In this age of transparency, and with regulatory recommendations that shareholders should actively monitor the board and share in the responsibility for its performance, CEO-board communication is no longer a ‘soft’ function. It is a major driver of business performance.

2. Simplify and refresh your story
One of the easiest ways to be transparent is to keep your reports and other communications simple and focused on the lowest common denominator of understanding. Most CEOs and senior management teams assume board members know more than they do. But, typically, directors have varying levels of knowledge. Appealing to all levels requires telling the story from beginning to end - clearly, concisely, and candidly.

3. Contextualise, but don’t fall into the detail trap
When you're introducing new issues, find the right balance between strategy, tactics, and a high-level overview, versus the details. Put numbers in context so that non-financial experts can understand them. Use a strategic framework with some accompanying detail when needed, but reserve the granularity for answering specific questions or discussing the topic in committee. The best boards have staffed their committees properly and have given them the authority to do the granular work. As a result, when the topic is brought before the full board, the maturity level of the discussion goes up exponentially. Without this discipline, the full board can quickly move into irrelevant conversations and lose its focus.

4. Build one-on-one relationships
Trust and transparency are reinforced through personal relationships. For example, many CEOs today spend time on board members’ home turf once, and sometimes twice, a year. This enables deeper relationships to form. As you get to know your board members individually, strive to understand their diversity of personal styles. Who is most interested in data and who in people issues? Who wants details, and who looks for the ‘big picture’? Find out, too, how each director likes to be communicated with—email, phone, or face-to-face? Customise your communications to their personal preferences.

5. Celebrate the individual
By taking the time to get inside each of your board members’ heads, you can relate to them in an empowered and non-defensive way. When they disagree on an issue or react in doubt or anger, you can validate their perspective because you understand their unique point of view, which serves to enhance your overall effectiveness with your board.

6. Never make board members look stupid
In our work we often see new CEOs in the boardroom trying to answer questions as fast as they can to show that they are ‘all over it’ and to prove to the board that they made the correct choice in executive leadership. It’s an approach, however, that results in just the opposite outcome. Board members who have tried to think of two or three smart questions may end up looking dim in front of their peers.

6. Assume nothing
Avoid coming into board meetings with assumptions on specific topics. You may think you are correct, but this does not equate to the board’s full acceptance of your perspective. Assumptions can lead to a lack of preparation on a key topic, which when challenged can yield the wrong outcome. We have observed situations where CEOs believed they had alignment around a particular acquisition, for example. And, indeed, they may have had alignment at the philosophical level. But when individual directors were pushed, their views differed radically on how the deal should unfold and what their individual BATNA (‘best alternative to a negotiated agreement’) was on how much they were willing to pay.

7. Don’t be a smart Alec
One of the CEOs we coach, a youthful and aggressive leader, is often the ‘smartest person in the room.’ He and his team had identified a target company for acquisition and began the early stages of negotiations. In a board meeting he mentioned the deal in passing and asked for approval to proceed. His request was shot down instantly by the chairman. In fact, the board said it was too early to even discuss the proposal because they had not been briefed on it. The CEO was visibly distressed and became emotional in the meeting, to the point that he had to excuse himself for a time before re-entering. The company ended up losing the acquisition to a competitor.

Instead of assuming, take the board on a journey that paints the full picture. Remind them of previous conversations on the topic. Drill down at the individual director level to make sure you understand the views of all board members. Keep an open mind. Take notes. Always leave time for questions and answers in board presentations. Follow up on suggestions and report the results at the next board meeting.

8. Spring no surprises
The number one mistake CEOs make with their board is surprising them with information or time-based decisions without giving them the full background and preparation. One board member put it this way: ‘There’s nothing worse than when a CEO ‘works things under the radar.’ When the issue doesn’t get resolved, we hear about it and it becomes a huge problem.’

9. Prepare the ground
Again, make no assumptions about what is known or not known. Don’t assume that because you have briefed a specific director, everything is fine and everyone is in line. Pick up the phone between meetings to brief directors on key issues. Send background points to ensure that they are aware of the upcoming discussion. Learn how to manage to desired outcomes versus trying to force them in the moment.

Share the good news and the bad, unadulterated. If your board gets bad news about the company before you tell them, you have killed their confidence. And no doubt your job.

10. Tell the whole truth—and nothing but

It might seem easy to work around the board, but it will cost you in the long run. In some instances, we have seen CEOs answer a specific question on an issue instead of telling the board member the question they really should have asked was ‘X’. Some have addressed a significant issue in pieces, allowing only some of the information to come forward rather than the full story.

Always come clean, and come clean early. Asymmetries in information erode trust and can eventually lead to your downfall. KITT is the key to keeping your board fully informed, avoiding gaps, and building relationships that are grounded in integrity. In all board interactions, transparency is the grease and trust is the glue. Without them, little will run smoothly—and all may fall apart.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Upcoming Events

Subscribe

Get your essential reading delivered. Subscribe to Management Today