Build your best Board and Leadership Team combination

How well integrated is the top tier of your firm?

Your effectiveness as leader of any organisation depends on how well you and your senior team work with the Board. Two issues will shape the outcome of any Board/top team combination. One is the basic competence of the directors and top team, individually and as group members. The other is the quality of the web of relationships between all the individuals.

You can transform your organisation by working through these issues with everyone in the room. This is the top tier of your organisation, which I see as the core engine of the organisation. It is the originating centre of the most important decisions and with luck is the source of leadership and innovation for the entire enterprise.

Bland, safe ‘Board performance reviews’ and ‘team building sessions’ reinforce the separation of each group and put them in the position of observer (and judge) of the other.

This core engine is crucial to the organisation's survival and needs attention in its own right. This is regardless of the business model, industry or phase of growth of your organisation. It applies to large corporates, professional firms and not-for-profits. The interaction between the Governance group and the Leadership group is a human as well as a technical process. But it is often broken.

I was recently looking through one of the key textbooks on 'Board Governance’. As I mostly work with executives, I was curious about what this book had to say about the Board’s interaction with the executive team and the CEO. I only found one section on this topic referenced in its 608 pages and that was focussed purely on remuneration. Conversely, in the literature on how to lead an organisation the Board is usually only referred to as the entity to 'present to'. Yet the relationship has the potential to be much more fruitful than that. 

So how can you address the engagement between your firm's governance body and your Senior Leadership Team?

These two decision-making groups have different mandates for the organisation. If kept too separate they don't mesh to produce good effective strategic action. Too much overlap and the big issues get washed away by the detail and conflicts of interest. 

What you need is to design how you integrate the activities of both groups.

If you can get the right degree of integration, the combined group becomes the prime source of energy in the organisation. It’s the point of last recourse for difficult issues as usual, but it’s also the inspiration source that makes the organisation thrive. 

This is how things work in the more effective top-tier groups that I've dealt with. This notion of the combined group is at the heart of advanced thinking on governance, the reality of leading high performers, and the effective direction of complex organisations in complex circumstances. 

Map the competence you need.

It’s always instructive to map the talents needed Board and Senior Leadership Team. You may already do this in some form as part of various reviews. However the starting mindset for a competence map is, ‘what do we need?’ before asking ‘how well are we doing?’.

A map of necessary talents, could look like this:

What do we need from the Chair?

• Maintains an unbiased view of issues.
• Reads the room and gives all members a voice.
• Gives discussions room to breathe.

The CEO

• Presents the essentials for the Board’s decisions.
• Helps the Board see the whole organisation.
• Brings bad news, as well as good, and works with the Board’s advice.

Board members

• Decides and accepts individual responsibility for group decisions.
• Helps the full argument develop even when of a firm view.
• Knows and enquires effectively into the organisation.

Top team

• Recognises and responds to the Board’s priorities rather than short-term events.
• Listens well, responds with potential solutions.
• Presents reality.

Each organisation needs a different shape of competence in the core engine. The issues dominating the strategy influence the talent needed around the table. Thinking together about this reveals your gaps and strengths, and greatly helps you work well on the big issues as well as ‘business as usual’.

Limiting the group’s answers to the three essentials for the organisation today gives each person a simple touchstone for guiding their own behaviour but helping the group stay in its most effective state.

The relationship map

The map of the relationships across the group reveals where collaboration and teamwork produce high performance. It also highlights the fractures and split decision making that produce dysfunction at the strategic level. As you may guess, mapping the relationships calls for some truth-telling. 

For example, several Board members at one of my clients independently advised a member of the Senior Leadership Team to apply for the CEO role they knew would become vacant. This was done privately at a Board member’s home. It was known that the incumbent CEO was leaving the firm in line with an agreement with the Board but she had not formally resigned. The meeting took place without the knowledge of the Chair. They thought this was 'helpful'.

What this reveals is: 

• Directors not aligned with the Chair, nor with proper Board functioning. 
• A gap in the relationship between directors and the CEO. They stepped into managing rather than governing.  
• Naiveté about what was needed in the CEO role in the next strategic cycle. (Or worse, assuming they knew better than the rest of the Board). 
• A skewed understanding of what makes a Senior Leadership Team, with its CEO, an effective group.

This one conversation led to a series of events that almost killed the individual's career and delayed the CEO appointment process by months. It soured the relationship of those Board members with the Chair and confused the market about the organisation’s strategy. It would be easy to trace about a million dollars in extra cost to one misguided conversation.

A map of the relationships between the Board and the Senior Leadership Team that the Chair and I reconstructed later helped him articulate the gaps between these three Board members and the Chair (possible hidden distrust). It helped us understand why some Board members had a stronger relationship with one Team member over the others.

It also struck us that the strength of the relationship between the CEO and the Chair had contributed to a hidden split on the Board between the ‘CEO faction’ and the ‘successor faction’. This split had not previously been dramatic or consequential but explained the tone of some previous Board discussions. With this split, a senior team member was able to go around the CEO directly to their favourite Board members to influence decisions.

It’s equally unhelpful when a CEO keeps their team 'out of harm's way' by not encouraging them to engage with the Board appropriately. This causes another kind of fracture line. The Senior Leadership Team is then too separate and merely gives the Board information rather than knowing how to help the Board make its decisions. The impact of a ‘bottleneck’ CEO is well known:

• Weak personal commitment from individuals to the strategy.
• Repeated botched recruitment into both Board and Senior Leadership Team.
• Board meetings that rehash the same information for too long, missing the window for vital investment and innovation decisions. 

To avoid some of these issues, the combined team can come together to answer the two vital questions:

What is your firm’s definition of ‘good personal relationship’?

What is your firm’s definition of ‘good role to role relationship’?

Apply these questions to each of the relationships:

• Chair and the CEO
• Chair and any Board member
• Chair and any Team member
• Any Board member and the CEO
• Any Board and any team member
• The CEO and any team member

It looks like it can get complicated, but it’s worth it. Differentiating the person-to-person relationship from the role-to-role relationship is useful in situations where roles call for decisions that are necessary for the organisation yet difficult for individuals. The twelve definitions that emerge from this process give everyone guidelines for understanding all the relationship pressure points and how to negotiate them with respect and effectiveness.

Defining ‘good’ together sets clear expectations that underpin deeper mutual understanding and collaboration. It provides everyone with guidelines for creating a culture at the top that works well and is congruent with the aims of the organisation. It also enables differences to generate creativity rather than conflict. Without this understanding, unconscious reflexes in the face of complexity and risk can surface in dysfunctional behaviour.

Building an integrated group

Focussing on the best way for the Board and Team to operate is a task that needs separate attention away from the normal meeting tempo. Everyone needs to contribute to developing the joint charter, the rules of behaviour, between the Board and the Team.

With an honest map of the skills and relationships that will make the combined group work well, you can deal with reality. This will require everyone to bring the wisdom to accept that a complex web of relationships can’t be perfect. But you can also trust that the combined group can build better relationships and develop deeper competence, rather than fall into a default lower-performing pattern.

In an organisation this means putting in place clear rules that support good role-to-role relationships.

• How can your Chair and CEO work best together given their personalities and the demands of their role? Do they have informal conversations that foster mutual respect, as well as formal agenda-driven meetings?
• Do the CEO and Board have mechanisms that foster mutual respect and understanding? Do you have an independent resource available to resolve personal differences that overflow into how the CEO’s presentations are treated?
• What rules govern the interaction between Board members and Team members outside the Boardroom? When is it OK for a Board member to call a Team member to discuss an issue without the CEO or other Board members present?
• If the Chair directly contacts Team members, does this weaken or strengthen the CEO’s control over the Team’s culture and cohesion?

Not everyone will like the outcome of either map. It will need some finessing of the emotional responses, which the Chair and CEO will need to address together.

Personalities who feel threatened by discussing relationships or competence will fire up to resist the discussion. The discussion can shock a Chair into realising why some Board members don’t meet the crucial competence criteria.

This approach looks complex if your culture is focussed on reaffirming itself. Unfortunately, this is the minimal complexity you need to get your head around what’s at stake. It would be easy to leave these considerations until there’s time. There won’t be ‘business as usual’ time on any agenda. The time for this task is strategic time, setting the framework for the big agenda, and needs separate attention. It is therefore appropriate to do it every three to five years, like the strategy cycle and its value is at the strategic level.

The clarity and commitment that result from mapping and designing the top tier will have a powerful impact on the organisation's performance.

Every organisation has this issue. In large corporates there are clear distinctions between roles and plenty of resources to enable everyone to contribute well. In more closely held organisations, the boundaries can be unclear. In family companies, some people simultaneously may hold roles on the Board, the Senior Leadership Team and in the shareholder group. In professional firms it’s easy to have some partners reporting to themselves so that drawing up these maps becomes dramatic comedy.

In your own firm, are all participants in governance and leadership roles clear on your relationship expectations and rules of engagement? Are all participants clear on competence and performance expectations? Do they understand the quite distinctive talents and culture needed on the Board as distinct from the Senior Leadership Team?

What does this simple but challenging enquiry tell you about how you can lift your game?

** Contact me directly to discuss how to adapt this approach to the top tier of your firm to make it part of your strategic cycle. 

As a first step, I can provide a half-day workshop to explain the mapping documents with your top tier so that they can see its power in making their roles more effective and enjoyable.