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Defining a New Model for Board-CEO Engagement

CEOs and their boards of directors are divided on how they perceive the effectiveness of their relationship. Here’s how they can address it.
Overview CEO perspective Board perspective Partnership in practice

More than 2,400 CEOs and board directors around the world responded to our latest Measure of Leadership survey exploring the complex board-CEO relationship. As part of the survey, we asked CEOs and directors about the nature of their relationship today and how it could be improved to enhance business performance in a complex and rapidly evolving business environment. Explore their responses.

Where CEOs see room for improvement

CEOs stressed the desire for their boards to evolve how they work, in general looking for a better balance between accountability and support. CEOs said they want more strategic thought partnership, subject matter expertise in critical areas such as AI and cybersecurity, and more room for strategic debate and discussion in board meetings.

“I need them to bring ideas and information related to the long-term strategy develop­ment. Their input would greatly improve the thought process and relevancy of the decisions. It would also result in greater focus on the tactical execution needed to achieve the strategy and goals.”

“The board is not as vocal as I would like. Something as simple as ‘You are on the right track,’ or ‘This is good’, or ‘Have you thought about doing something else?’ We are delivering good results but there is a lack of recognition that we are doing the right things.”

“Experienced board members often are not the first ones to stay at the forefront of new developments. The speed at which cyber threats and AI developments move is so fast that we need more board members who are working to stay at the cutting edge of what is happening in the world.”

“Board members would benefit from more overseas visits to better understand our global operations. The meetings could then integrate this knowledge and focus on issues rather than educating board members of global operational issues.”

“I get conflicting feedback on certain topics and there isn’t ‘one voice’ from the board.”

“The board should understand how relevant the well-being of our employees is, the sense of safeness and even enthusiasm that we need to permeate the whole organization with.”

“Broadly, I don’t see gender diversity in the board room shifting as I’d hoped.”

“Every true relationship needs a give and take with value added from both sides. I probably need to push back more and ask more of them.”

“Sometimes boards need to acknowledge that the CEO needs different input at different times. I have had chairs who see it as their duty to try to get you to do what they would do as CEO, sometimes without the benefit of relevant experience.”

“Sometimes it feels like I am in it alone, that the board is there to just measure rather than be in the same boat.”

“Need to dedicate time with CEOs outside of the governance/reporting framework to better understand business challenges. More engagement on strategy and the customer will help in understanding the challenge faced by CEOs.”

“Established senior leaders tend to be nominated for board director positions, although many of the changing business environment dimensions are best understood by younger generations.”

Where boards see room for improvement

Directors also see an opportunity to evolve how they engage with the CEO but feel it must be a two-way process, with the CEO being clear on where they need the board to dig in the most. They also say boards would benefit from adding more relevant and current skill sets, increasing their engagement with the CEO and showing greater willingness to act quickly when performance lags.

“Despite Teams and Zoom being so cost-effective and practical, I always prefer in-person meetings. The environment is changing so fast, and I cannot afford to lose pieces of information: a silence, a look, a question raised during the coffee break, a detail can make the difference.”

“As a CEO I was frustrated by the ‘drop in’ BOD members that were unprepared for meetings, asked questions that were answered in the read ahead and created work for me and my team without being a resource. As a BOD member you should think of yourself as an operating partner resource available to assist.”

“As the complexity of the business landscape continues to change, I think the relationship needs to deepen and the discussions will need to continue to be more open and ask each other the hard questions.”

“As the business continues to scale internationally the demands for growth will require more understanding of local markets and also use of technology to scale profitably.”

“Too often, CEOs and other board members are stuck in the past, thinking the future will resemble it. Instead, the future will be completely different and require new skill sets for leaders as well as employees.”

“Boards have to act quickly when they have installed the wrong CEO in an organization. Delays can be catastrophic.”

“Succession planning is still a big weakness.”

“Boards need to be increasingly open to greater diversity not just in terms of backgrounds but of thinking, age, levels of skill and experience.”

“In today’s environment, the role of ‘professional’ board directors who sit on many company boards is counter to helping companies achieve growth and manage risk. Board directors should be limited to serving on one large company board, which allows them to go much deeper and provide good governance. Too many board directors sit on five or more boards; that's too many to be effective.”

“Some directors are channeling expectations from other board service that does not translate to the unique situation of our organization.”

“The chair is clear on what is needed, but the board has not engaged fully and does not necessarily feel accountable for outcomes. Until that happens, it will be difficult to maximize board talent and participation.”

“I believe that board members can be become more effective in driving organizations forward, but this has to be a two-way process.”

Partnership in practice

While there is no one-size-fits-all model for an effective board-CEO relationship, directors and CEOs shared perspectives and processes that they have found effective in their own work. Examples included building mutual trust through candid conversations, engaging in formal board or CEO training and building a shared vision for strategy and culture.

“A board at a mature company needs to bring insights to each meeting that help the management team and CEO see around the corner or head-on address the current challenges the business is facing. That requires both industry experience and insight from outside the current organization to complement the insider knowledge of the management team.”

Board member

“A well-functioning board acts as a thought partner to the CEO — they both challenge and encourage, as needed. To do so, boards must obtain an added (external) perspective, resisting the urge to get caught in the weeds. As the cliche goes: boards must work on the forest, not in the forest.”

Board member

“My board arranged for the CEO to have very intensive preparation for the role provided externally which was very helpful. I think this should not be ‘set and forget.’”

Board member

“Be willing to engage in formal board training and work on formal programs to work on board/CEO relations.”

CEO

“It is helpful to have chair and board members who have also been CEOs.”

CEO

“Always understand that there are many ways to accomplish goals. Choose best for the organization at that time.”

Board member

“You need a couple of senior board members who can form a bridge between the management and the board to ensure that both appreciate and understand each other’s perspectives, which in the ultimate analysis helps create a win-win solution for the business.”

CEO

“I have a lot of 1:1 touch points with the directors to gain perspective and share my thoughts on the changing landscape before board meetings/decisions. This has given me better insight on the direction and/or pushback I may encounter. It also gives me an opportunity to gain support from the influencers on the board.”

CEO

“I believe in complete transparency with the board and I communicate proactively on both good and bad news. I hide nothing from them and share bad news early. I believe it help us maintain a level of trust that can sustain challenging situations.”

CEO

“We need to not be afraid to challenge the status quo and need to constantly review what we do and how we operate to ensure we have the right people, systems and policies in place and not be afraid to change our position to align with the future.”

CEO

“Creating simple core values that are understood inside the organization, with the board, and with customers and vendors like integrity, fairness and communication can help be the guide through uncertainty.”

CEO

“The board must find the right balance between enabling and challenging the CEO and his team. Mere cheerleading falls short of what a board should do.”

Board member

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