Fine lines in the relationship between the chair and the CEO.

Author:Britten, Neil
Position:BOARD DYNAMICS
 
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In Britten Coyne's recent research into the dynamics of the relationship between nonexecutive chairmen and CEOs on the boards of large international corporations, some surprising lessons emerged, which may also be applicable to the relationship between combined chair/CEOs and their lead directors.

* CEOs often don't fully understand the chair's role: The chairs we interviewed were very experienced business leaders, most with several CEO positions on their resumes. Yet many admitted that it was not until they became board chairs themselves that they fully understood what this role entailed. (Twelve chairs--men and women--were interviewed. Their average tenure as chairs was greater than 10 years, over an average of three roles. Their board-level experience covered more than 20 business sectors for just over 100 organizations. The full report is available at www.brittencoyne.com.)

A frequently cited example wasthata CEO may interpret frequent meetings requested by the chair as a lack of confidence, whereas chairs see them as critical to developing the trusting relationship that underlies the effective functioning of the board. Only in retrospect did our interviewees appreciate how the pressures of being a CEO had limited their understanding of the chair's role.

Moreover the majority of our interviewees felt strongly that the roles of chairman and CEO should be separate, even when they had not felt that way when they were previously a CEO.

* The "lifecycle" of chair/CEO relationships is fairly predictable: An early stage of relationship building is likely to be followed by a stable period, typically several years long, during which harmony is the rule. However, unless the transition of the chair or CEO is anticipated and managed smoothly, the end of this harmony is often triggered by an unanticipated crisis-a strategic failure or rapidly escalating threat.

* The chair/CEO relationship can very quickly unwind: We found a unanimous view that crises can quickly undermine trust in the chair/CEO relationship, just when a CEO believes they most need their chair's support. When this happens, one of the chairman's key roles is to decide when to replace the CEO. Chairs recognized that this sudden shift in the chair/CEO relationship inevitably comes as a shock to new CEOs.

* A successful chair/CEO relationship can lead to board "risk blindness": Chairs were all keenly aware of the board's critical...

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