Member Shane Buckley Speaks: Reaffirming Executive and Non-Executive Function
The Challenge:
The case at hand was brought by a CEO of a company that had recently run through several CEOs. During board meetings, the chairman routinely micromanaged the CEO in front of his executives and dispatched marching orders. The chairman had been on the board for several years and had also served as CEO at other companies.
If you were in this situation, what would you do?
I would meet individually with the chairman of the board, as well as every board member, and clarify precisely what is expected of you as CEO. There seems to be some confusion on the part of the chairman in understanding his role. If I were you, I would sit down with him and discuss on behalf of the board, what he expects you to deliver as CEO of the enterprise. Remind him openly about your obligation to run the company and responsibility for the operations and all executives therein. You may want to reach out one-on-one with the other board members and get their perspectives - what is your role as CEO? Then, you can go back to the chairman and report the board’s consensus regarding the role of CEO. Raise the issue at the next closed session of the board to further clarify the expectations of the CEO.
You’re in a tough spot here. Normally, the role of the chairman is to run the board meeting, achieve the agenda, ensure all parties provide relevant input, and appropriately record the decisions. Yet, one of the biggest challenges CEOs have is preventing overactive boards from overreaching into the executive function. The key is to reaffirm the difference between executive and non-executive functions – a critical distinction so the business can operate within its governance model, and you can do your job as CEO.
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