Executive sessions and CEO anxiety.

• Author: Rock, Robert H.
• Position: LETTER FROM THE CHAIRMAN

'IF THEY'RE DONE in five minutes, I know I'm okay. After 15 minutes, I get concerned; after 30 minutes, I get anxious; and after 45 minutes, I get really nervous." With this time frame, a chairman and CEO expressed to me his varying levels of anxiety over his board's executive session. During these sessions he assumes the independent directors are talking about him, and he gauges "the degree of hot water I'm in" by the length of their meeting.

In the post-SOX world, this CEO is not alone in his paranoia. Many CEOs are anxious about the deliberations taking place in their board's executive sessions. If the board has a nonexecutive chair or a lead director, he or she chairs the executive session. If not, the head of the nominating and governance committee may chair it. Alternatively, the chair may rotate, in alphabetical order, among the outside directors. A chairman/CEO may prefer the latter approach, since it does not establish a permanent power base that might compete with the board chairmanship.

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Executive sessions typically have no set agenda; consequently, whatever is on a particular director's mind can initiate a discussion, which in turn can branch off in many directions. Often the CEO is the focus of this discussion, and sometimes an executive session can turn into a spur-of-the-moment, ad hoc assessment, which can differ significantly from the formal CEO assessment process that most boards have instituted. Therefore, CEOs may have reason...