The road to becoming a CEO is long and arduous. People looking to become CEOS often begin developing valuable characteristics early in life. Around age 13, Bill Gates began racking up 10,000 hours learning to program on a high school computer. Edward Lampert, of Sears, lost his father at 14 and helped support his family by working after school and on weekends while still maintaining good grades. Those striving for the top position, obtain a good education – both in and out of school. When natural skills are lacking, being willing to seek a mentor or hire a coach helps put individuals on the path to success. Preparation is key for the tough job ahead.
CEOs have a lot of responsibility and preparation for filling such a role is important because of the stamina required and the high level of accountability that lay on the shoulders of a CEO. A partial list includes
- Overseeing long and short-term strategic plans – you need to be a good strategist
- Organization and staffing
- Financial budgets and being profitable
- Assessing, monitoring, and managing risks
- Ensuring internal controls and management information systems are in place
- Conducting organizational activities in an ethical and lawful manner
- Maintaining corporate citizenship
- Communicating effectively with shareholders, employees, Government authorities, other stakeholders and the public
So proper preparation is in place and you land the CEO slot of your dreams. Now, since you’re in charge and calling the shots, it’s smooth sailing, right? Not exactly. Every boss has a boss and the CEO’s boss is not only stakeholders like investors, but the Board of Directors (BODs). Working with a BOD is sometimes a slippery slope.
Both executives and some board members may struggle in defining the areas of governance and management as an example. Since the BOD has a strong hand in the selection or appointment of the CEO, the CEO “inherits” the BOD in such a working situation. Further, depending on the service time of BOD members, these working relationships can last several years. Here are some ideas that can help.
- Ensure that everyone’s role is clear, including the Board Director (or maybe especially the Board Director)
- The BOD should be a guiding force for providing discipline, accountability, strategic guidance, and expertise
- Make sure every member of your BOD is aligned with the company’s goals
- When the opportunity arises to change board members, be sure you select people who will provide excellent input. Not only does this mean people who provide great business strategy, but people who are not “yes men and women.”
- Involve your BOD in talent and culture – including planning for your successor
- Include marketing and branding topics for your BOD to explore
- Trust, collaboration, transparency, and strong dynamics make any Board more effective
- Provide both continuing education and periodic evaluation for your Board
- Connect with your Board director between meetings. The idea is to build a partnership, and don’t be afraid to ask tough questions
- Serve on the Board of another company – but only one
- Make sure your Board is diverse
SOBs (British version – (Silly Old Buggers)
According to a recent study by the IRRC Institute, the average age of Board members is 62.4 years – even in technology! So much for diversity. You can read the full report here. This is not to say that just because people are of a certain age, they don’t keep up with trends or that they don’t use technology. Indeed, I have, on several occasions, been more “technically fluent” than people far younger than me – you know, like a six-year-old. OK, that’s a joke and they’re not going to get much better. Moving on…to reiterate, every Board needs a diverse membership. In SOB – old is relative for the purposes of this blog. At any rate, before I get myself in trouble with the Evil HR Lady, here are some ideas to ponder.
- Some Board members put their own self-interest above that of their stakeholders. They don’t rock the boat so that they can protect the prestige of being a Board member and, of course, the pay. As the CEO, you need to encourage healthy and relevant debate.
- And, yes, there are those who fail to see the value in keeping up with business, industry and technological trends.
- Both above, I suppose, can lead to a dis-involvement (is that a word?) in strategy. Being strategic requires a lot of, at least, general knowledge of trends, the organization, and the industry.
- Unethical behavior cannot be tolerated.
- Toxic Board members are more disruptive that meets the eye. You know them, they roll their eyes, take deep sighs when others are speaking, and, more overly, may bully others.
These Board members must go. In the more egregious behaviors, they need to turn in their resignation and manage the toxic member out. That’s how the Japanese do it. The individual is pushed so far to the outskirts of participation they quit on their own. Of course, this can take time, requires a lot of support and patience.
No amount of preparation can prepare CEOS or BODs, or even SOBs for the massive, and no signs of slowing downs, changes confronting business today. A report by NACD offers some examples:
- Growing complex business environment
- Rapidly changing technology
- Volatility in global politics
- International economic and trade issues
- Information overload
- Government regulations
- Activist investors
- Greater public scrutiny
So being a CEO does require a lot of preparation, skills, and fortitude, and you will need to bring, as the British say, “a stiff upper lip.”
Graphic Credit: BigStock.com
Chakler, R. (n.d.) What Private Company CEOs Want From Their Boards. Retrieved from Private Company Directors.com http://www.privatecompanydirector.com/features/what-private-company-ceos-want-their-boards
Feld, B. (2012, August). All CEOs Should Sit on Another Company’s Board. Retrieved from Fortune.com http://fortune.com/2012/08/16/all-ceos-should-sit-on-another-companys-board/
Garry, J. (n.d.). How a CEO and Board Chair Can Build an Amazing Partnership. Retrieved from Joan Garry Consulting.com http://www.joangarry.com/ceo-board-chair-relationship/
Manville, B. (2016, April). Want To Be A CEO? Five Essential Qualities Boards Look For. Retrieved from Forbes.com https://www.forbes.com/sites/brookmanville/2016/04/10/want-to-be-a-ceo-five-essential-qualities-boards-look-for/#e3ef3af26493
McKinsey & Company (2016, September). The CEO Guide to Boards. Retrieved from Mckinsey&Company.com https://www.mckinsey.com/global-themes/leadership/the-ceo-guide-to-boards
National Association of Corporate Directors (2016). Report of the NACD Blue Ribbon Commission on Building the Strategic-Asset Board. This report can be obtained from: https://www.nacdonline.org/Store/ProductDetail.cfm?ItemNumber=35303