Toxic chemistry?

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

RECENTLY, while interviewing for a director position, I mentioned to the executive search consultant that I knew the company's CEO. Over the course of several years we had talked about business in general and some of his industry challenges in specific. We had gotten to know and like one another.

The search consultant thought that this relationship might raise a red flag since nominating committees increasingly have become wary of prior personal relationships between individual board members and the chairman/CEO. She said that these close personal ties were often considered "toxic" by nominating committees. This comment got me thinking about whether a personal relationship with a CEO should disqualify a director nominee.

I have served on several boards where I knew well, sometimes very well, the chairman/CEO prior to coming on the board. My knowledge of his/her capability, background, and character enabled me to make a highly informed decision to join the board. Likewise, the chair knew well what he/she was getting in me as a director. We were not cronies, nor golfing buddies, nor in each other's pocket. We were friends who had mutual respect for one another's experience and expertise and trust in one another's character and judgment. The commitment to serve on a board where you will be spending a lot of time in close quarters with your fellow directors, in particular the chair, requires a mutual understanding that you can work well together.

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In my experiences, a close relationship with the chairman/CEO can have many advantages. First, we can rely on one another to speak frankly and honestly. The chair/CEO does not have to guess nor be...