In the post, Part 1, we reviewed the first 5 practices. This post is a continuation from that post, and reviews the remaining 5 practices.
6. Ensure strategic plan that includes action plans
The action plan part of an overall strategic plan specifies who is going to do what and by when in order to achieve the more top-level goals in the plan. Too often, strategic plans stop short of producing action plans. Yet, one of the biggest reasons for conflict in the workplace is confusion about roles in the organization. Action plans can help greatly to clarify the working relationship between Board members and their CEO.
7. CEO should participate in certain Board committees
The CEO and other managers can provide great value as members of various Board committees, especially those focused on finances, planning, public relations and human resources. Other committees, such as compensation, audit and governance are best staffed entirely by Board members.
8. CEO should provide information to members before meetings
Some CEOs have learned that one of the best ways to incapacitate a Board is by giving members new materials during a Board meeting, so that members are quickly overwhelmed and confused. As a result, members often end up agreeing with whatever the CEO suggests. Seasoned CEOs share materials with members well before Board meetings.
9. CEO and Board Chair mutually develop Board meeting agenda
Far too often, the CEO develops the agenda. This practice can inadvertently cultivate yet more Board dependence on the CEO – a Board that is not effective. The agenda drives what Board members work on. It it’s not on the agenda, Board members often don’t know about it. The Board Chair and CEO should each draft a version of the agenda and then combine them into the final agenda. Each topic should have a time limit for discussion, debate and decision. If members haven’t addressed the topic within that time, then delegate it and move to the next topic.
10. Annually evaluate the performance of the CEO
Board members often don’t evaluate the CEO unless the CEO is not performing well. Then the evaluation is used as some form of punishment. This can lead to a lawsuit for discrimination. There should always be Board-approved personnel policies that, in part, guide how employees (the CEO is an employee) are hired, evaluate and fired. A fair and equitable performance evaluation of the CEO can greatly clarify mutual expectations and enhance the quality of the working relationship between the Board members and CEO.
What do you think?
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Carter McNamara, MBA, PhD – Authenticity Consulting, LLC – 800-971-2250
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Carter McNamara of Authenticity Consulting, LLC, provides organization development and consultant training services, and is developer of the Free Management Library.
Julie Garland-McLellan uses her experience and depth of knowledge in corporate governance to show boards with limited resources how to be more effective through practical governance innovation and know-how.
Nick Lindsay of Elemental CoSec, provides corporate governance, legal and company secretarial advice to a wide range of companies in the UK.