Effective chair-CEO separation.

• Author: Walton, Elise
• Position: BOARD REPORT

A chair-CEO relationship works well when there is a supportive context--like having the right people around them--in place. Having a strong, supportive board; a competent and accessible management team; and a culture of openness reinforce the effective working relationship of the chair-CEO.

Where the board has low support for management or for the chair, anticipate problems. Where the management team sees the board as weak or overinvolved, that too will cause problems.

Where support is not in place, it is the first order of business for the chairman and CEO to understand the issues and to take action. There have been cases where the CEO and chair worked together to rebuild the board, in some cases replacing all or most of the directors. Where there are issues with management, the two should work together to ensure they are addressed either by replacement, development, or role changes.

A competent board

Having a board with competent directors who know how to work together is, of course, a vital condition for the enterprise. It is also vital for the CEO and chair relationship.

First, a board that understands the nonexecutive chair role will channel discussion and activity appropriately--avoiding unnecessary conflict and miscommunications.

Second, a strong board can organize to do work effectively - a good audit chair, compensation chair, and nominating and governance chair will provide appropriate care to their domain of responsibility, allowing the chair to focus on the full board areas. In total, the board works better.

Third, the chair and the CEO should regularly compare perspectives on the board and directors, with the chair responsible for incorporating the information into the overall board development plan.

A strong management team

Although chairs usually report that the CEO is responsible for managing the executive team, when directors perceived problems in the management team...