Being a first-time CEO poses many new challenges, and one of the trickiest can be interfacing with a board of directors. Perceptive executives quickly realize that boards hold hiring-and-firing responsibility over them; and boards clearly have significant influence over the fate of any business. With that in mind, it’s no surprise that prudent CEOs focus on carefully fostering board relationships. Unfortunately, this very inclination toward care-taking can sometimes backfire and lead to costly mismanagement of the board. Beginning with my first CEO gig in 2007, I’ve made my share of mistakes on this front, a few of which are outlined below…along with a lesson learned that should guide all of a CEO’s board interactions:
· Transparency vs. Overload: How much information should a CEO share with a board? In some organizations, boards are perceived as external entities “to be managed or handled.” That typically means censoring or tightly controlling the information boards receive, which can really hurt a business. As a first-time CEO, that’s not how I wanted to roll. Instead, I planned to share information freely and be perceived by the board as admirably transparent. So, I became an over-sharer. Specifically, I invested a lot of precious time and energy sending the board gobs of information, a relatively small portion of which was actually useful to them. That board didn’t view me as an open-book. Rather, I had become an incessant and overwhelming stream of data that required resources to be consumed and interpreted. Worse, I was signaling to the board my own inability to call-out the signal from the noise. In this instance, more was definitely not more — it was overload. BOARDS NEED THE RIGHT INFORMATION THAT ALLOWS THEM TO EFFICIENTLY FOCUS ON THE KEY DRIVERS OF THE BUSINESS.
· Pitching vs. Sand-bagging: Smart CEOs recognize that board members (particularly investor-directors) have a lot riding on the success of the company. So, some CEOs fall into the trap of feeling the need to paint a rose-colored picture of company progress. In my experience, board members hate this. They understand that things are never perfect; so, they are inherently suspicious and immediately distrustful of the executive who tries to pitch, promote, or “sell to” the board. My problem was the opposite. I was so intent on being sober and credible (“under-promise and over-deliver,” as the mantra goes), that I consistently under-sold our progress and overemphasized our challenges. This mistake can breed its own forms of mistrust and concern among board-members. Although no one wants to be perceived as a promoter, it’s not much better to be considered a “sandbagger.” BOARDS NEED HEALTHY AND BALANCED EXPOSURE TO THE EXCITING OPPORTUNITIES AND THE INEVITABLE CHALLENGES THAT EVERY BUSINESS FACES.
· Professionalism vs. Perfectionism: We all want to be considered competent and capable, particularly as new executives. So, we attempt to “stick the landing” when it comes to interactions with the board, particularly early-on in our tenures. But while professionalism is a required building block for dealing with boards, perfectionism is a stumbling block to be avoided. In my case, this perfectionist streak was particularly acute with written deliverables such as board packages. They were works of art — high production value slides and zero-defects, prepared weeks in advance of quarterly meetings. And they detracted from time I could have been spending building real value in the business — I was mired on the wrong end of the 80–20 rule when it came to preparing board materials. BOARDS NEED TO KNOW THAT THE CEO IS OVERWHELMINGLY FOCUSED ON DELIVERING TANGIBLE BUSINESS RESULTS; NOT PRETTY PRESENTATIONS.
· Pestering vs. Surprises: CEOs are generally a self-reliant lot, a trait for which we’ve generally been rewarded throughout our lives. The result is that we tend to think we should have all the answers; and we hesitate to ask for help — certainly from our board (“they might think I don’t know what I’m doing!”). In short, we avoid bothering board members with the countless and constant personnel challenges, product-problems, and client-issues that arise in most businesses virtually every week. Instead, we want to show up at quarterly board meetings and reveal a ton of great progress and momentum — like a great chef presenting a masterpiece meal to hungry diners — voila! I’ll admit that I have been prone to this pitfall as a CEO. It’s a particularly insidious one, because this approach works great when everything is going perfectly. Unfortunately, things are never perfect; and negative surprises are about the worst thing a CEO can bring to a board. In other words, the risk simply does not justify the reward. BOARDS NEED TO BE ENGAGED BY CEOs IN A WAY THAT IS CONSISTENT, EFFICIENT, AND JUDICIOUS…NEITHER ONCE EVERY 90 DAYS, NOR IN AN ON-DEMAND MANNER DURING PEAKS AND VALLEYS.
Admittedly, getting these items just right is a learned skill that requires a lot of error-filled practice. But one realization has proven to be consistently helpful in keeping on track: The CEO’s primary job is to engage the board. Specifically, the CEO needs to enable board members to share their significant experience, learnings, and pattern-recognition to the benefit of the business. The CEO should give board members timely, accurate, relevant information…and then shut-up and listen. That’s it. If the CEO fosters robust, honest, unrestrained, challenging discussion among board members, everyone in the business benefits. So, forget about the pretty slides; and focus on getting the board to engage with unrelenting candor. It’ll be the best use of everyone’s time and worth every minute of investment.