Assessing the CEO's Performance: Questions directors should ask before initiating a review.

• Author: Dattner, Ben
• Position: CEO MAINTENANCE

As a board member, one of your most important responsibilities is to evaluate the current performance of the CEO, while simultaneously ensuring that he or she receives the right feedback, incentives and support in order to develop in the role over time.

While this sounds simple and straightforward in theory, in practice evaluating a CEO can be both fraught and potentially risky.

In my experience evaluating CEOs on behalf of boards, I've learned that in order to maximize the benefits of a CEO evaluation while minimizing the risks, there are two sets of questions board members should formulate, discuss and debate before initiating a performance review.

The first set of questions are about the evaluation process itself and should be asked of, and answered by, board members. These overarching questions, once properly considered and answered, then inform the second set of questions which are then asked of board members, senior management and others about the CEO in the evaluation process.

Questions about the process

* Where does the CEO currently stand?

* What questions do u>e want to ask?

* Who do we want to ask the questions, and whom do we want to ask the questions of?

* What messages will these questions send?

* What answers are we open to?

If a board has complete confidence in a CEO, the goal of an assessment might be to evaluate the CEO's performance against metrics and goals in order to determine compensation, while also gathering feedback that will help the CEO further improve his or her leadership and management skills.

If a board totally lacks confidence in a CEO, the goal of an assessment might be to urgently determine whether he or she should remain in the role and, if so, whether some kind of intervention may be necessary. Depending on the dynamics between company management, the CEO and the board, the board may choose to ask the questions themselves or engage an outside resource to do so. In any scenario, boards need to keep in mind that any questions they (or anyone they engage to inquire on their behalf) ask about a CEO will have an impact and send messages about a CEO's standing and potential future outcomes.

Some feedback providers may fear that the process opens up the question about the CEO's future at the organization, while others may hope it will.

Most CEOs fall between the two extremes, e.g. the board members have some level of confidence in him or her but their support is contingent on the CEO's and the company's ongoing...