The top five questions boards of directors should ask.

• Author: Kraemer, Harry M., Jr.

Anyone serving on a board of directors knows that the number of potential issues facing the organization is almost endless: cybersecurity, executive compensation, enterprise risk management, board tenure and term limits, and crisis management. It is easy for boards to quickly become overwhelmed.

Having had the opportunity to serve on more than twenty boards over the past thirty years, I realize that one way for a board of directors to be highly effective is to put everything into perspective by asking themselves five key questions:

1) Do we have the right CEO?

It is easy to forget that the number one question which the board needs to ask is whether the current CEO is the right CEO for the organization. This requires a clear understanding of the issues and opportunities facing the company today and in the future. The board must have a development plan in place and the ability to provide the CEO with feedback. By feedback, I do not mean a "once a year feedback form from human resources." The feedback must be open, honest, continuous and transparent so the CEO understands where he or she stands and the areas which need to improve.

2) Do we have appropriate succession planning in place?

Even if the current CEO is doing a great job, it is critical for the board to focus constantly on succession planning. Who are the most likely internal successors to the current CEO? Are they being appropriately developed? Will these potential successors be prepared to take over if the CEO suddenly leaves the company? Too many boards delegate this task to the CEO.

The CEO can clearly help in the process, but I believe this is a key board responsibility. If a board routinely turns to outside candidates to fill the CEO position, one has to ask if the board is really doing its job. Studies have shown repeatedly that the success rate of outside CEO candidates is significantly lower than internal candidates. As we know, it is difficult enough for an internal candidate that understands the company to become CEO.

3) Do we have the right board composition?

Given the wide range of issues and opportunities facing any organization, it is critical that the board composition be continually assessed. Over time, many boards have members with overlapping competencies and lack the appropriate...