How to Build a Strong CEO-Board Relationship

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How to Build a Strong CEO-Board Relationship
October 14, 2021
Author: Rasd
Source: Rasd

The CEO-board relationship is defined by positions that differ but are interdependent. For example, as CEO, you are responsible for establishing and implementing strategy, while the board oversees approving and advising you on it.

What is a board?

A board of directors in the business context is a group of people appointed by an organization to help make decisions that affect its long-term plans. They include experts in their respective fields and companies with expertise in areas relevant to the organization. The board serves as a check and balance on management decisions and advises and represents the organization’s interests to the public.

Why boards matter

As you build your CEO-board relationship, you must understand what makes a board work well and apply those concepts to the CEO-chair relationship. Here are a few characteristics of boards that you can use for your own business:

Pros-and-Cons: Understanding how a board works in your context is crucial. Understanding the negative pros and the positive pros can help you build effective and constructive relationships. In addition, it’s critical to understand that, as a company grows, the board becomes less of a sounding board and more of a decision-making group.

Compensation: You’ll need to address this early on to build the right relationships. Ideally, the CEO and board agree on the compensation and benefits package.

How to build a solid CEO-board relationship

The first thing to understand is that the relationship between CEO and board member can’t just be one way. This doesn’t mean that the CEO doesn’t need to work hard to ensure the board knows what’s going on or isn’t the board’s boss. But in a healthy board, the two functions are mutually dependent on each other. The board gives the CEO good advice based on data and sometimes provides sounder judgment for the overall strategic direction. The CEO is there to take these good ideas and shape a plan to achieve them.

If your relationship with your board is weak, you may not see eye-to-eye on strategy and may not receive constructive feedback. With that lack of clarity, you can create friction within the organization and sluggish growth.

Conclusion

Strong relationships come from the knowledge and trust shared between two individuals. Similarly, it is essential to trust and know that the board comprises like-minded people genuinely interested in what is best for the company. Understanding and being comfortable with your board members’ expertise and limitations will help you and them to develop the best relationship possible.

We assist our clients in attracting and retaining capable non-executive directors who hold the knowledge, experience, skills, and executive competencies to become an effective addition to their companies’ Board of Directors, Audit Committees, Risk Committees, Executive Committees, Subject Matter Experts, as well as other crucial positions.