Directors desire a stronger line of communication with the CEO than is presently acknowledged. Sometimes lack of dialogue is a byproduct of board rules, including requirements for executive sessions without the CEO present. Sometimes it stems from failing to make such conversation a priority.
Committing to an intelligent exchange of ideas with your CEO will require discipline. It may also necessitate a change in how the board manages its time at meetings. However, the net effect will yield a stronger culture on your board. Here are some common sense approaches that can improve dialogue between the two parties.
Don’t let senior executive reports take up an exorbitant amount of meeting time. Visualize the board agenda full of senior executive presentations. All too frequently, they become chock-full of PowerPoint slides and end up consuming more time than necessary. On some occasions, it can feel as if these presentations consume 200% more time than they should have. The resulting effect is the elimination of important agenda items that allow for the CEO to directly respond to the board’s strategic questions. Efforts must be taken to ensure that time with the management team does not come at the expense of reduced time with the CEO.
Boards must take ownership of the meeting agenda. Boards are more likely to have quality interactions with the CEO if they take an active role in how time is managed at meetings. It’s the responsibility of the non-executive chairman or lead director to craft agendas that maintain discipline throughout the meeting. For example, in cases where a senior executive may be taking questions, these directors should make sure that tactical questions don’t slow up intelligent discussions on strategy.
A well-crafted board agenda is planned to consume defined periods of time. There must be dedicated time allocated in each agenda to “plain old direct conversation” with the CEO that is open-ended. My preference is to actually have these conversations at the beginning of the board meeting so that people aren’t packing up at the meeting’s end to get to a plane, a development that can short-circuits the dialogue.
The CEO, as well as the board, need to set the tone for strategic discussions. There is a duality of responsibility when it comes to improving communication between the CEO and the board. The CEO has the responsibility to ensure that the senior executives who present to the board have the ability to develop material that is at a strategic level and delivered in a “cut to the chase” manner.
Smart CEOs I have worked with take the time, prior to each board meeting, to share the company’s strategy with directors and give them a forum for feedback. Recently, I advised a CEO, who was new to his role, that he should dedicate 5% to 10% of his time to share information with directors and gather their feedback. This is the beginning of a journey that builds strong trust and becomes critical to shareholder interests.
Successful CEOs commit to sharing information with board members on a regular basis. A vehicle which is helpful for directors is when the CEO sends a very short update on current business activities, not written by the investor relations or public relations people. This effort to share current information encourages the director to communicate directly with the CEO and vice versa.
Commerce today requires agility of thinking and continuity. In a void of information, people either feel disenfranchised or come to their own conclusions which are not always correct. The rhythm starts at the top. Directors and CEOs have a shared responsibility to communicate effectively to achieve results for shareholders and re-establish investor confidence, thereby strengthening capitalism.
Stuart R. Levine, the founder, chairman and CEO of Stuart Levine & Associates, is a director of Broadridge Financial Solutions and chairman of the governance and nominating committee, and lead director for D’Addario & Company.