When to Seek Help to Solve Board, Chief Executive Conflicts
It may be a reflection of today's tense times, but there seem to be more sharp disagreements between CEOs and boards.
Certainly that's what Mimi Hull, a psychologist and founder of Hull Associates, is seeing.
"Part of the reason is that I don't know that each component really understands their own roles and responsibilities," she said. "A lot of times what happens is members get on the board and they feel they have a tremendous amount of control. Meanwhile, the CEO thinks they have control. There's a lot of role, responsibility and accountability conflict."
The outcome, she continued, depends on how the CEO and board choose to handle the disagreement. Often the conflict is shelved until the next meeting, the conflict arises again, and they still don't deal with the real issues.
"A better outcome is when they recognize the disagreement and they start to look for the real issue and separate the symptoms from the causes. What are we disagreeing about and who has the accountability and responsibility," Hull suggested.
She indicated the board should think strategically, focus on the big picture and not meddle in day-to-day operations. The CEO is responsible for running the organization.
"Another way of saying it is that the board sets out the ends, and the CEO is in charge of the means," Hull added.
Too often, she stressed, a new board member attends a first meeting and is greeted with strong approval and appreciation. But nobody clarifies what is expected of the new board member.
Disagreements between the board and CEO often trickle down through the organization. Or the issue may flow the other way, with a staff member leapfrogging the CEO and contacting a board member.
An ideal situation is when a disagreement yields a positive outcome. The issue at hand is reviewed and resolved. A board shouldn't simply rubber stamp everything the CEO does. On the other hand, a CEO who says to the board, "Tell me what you want me to do and I'll do it," may not understand his or her responsibilities.
Suppose a CEO contacted Hull and explained that the board and CEO seemed to be at odds more often than in the past. What can be done?
"At the risk of sounding flip about this, when it gets to that point, I often find they really do need to hire an outside facilitator," Hull responded. "They can be unbiased. It's hard to be a prophet in your own land, and your credibility is often increased if you do bring somebody in."
"People will say one thing among themselves and another to the CEO directly. Trying to get an honest assessment of what's going on is very difficult. The facilitator needs to identify the underlying conflict, then work with the board and the CEO to resolve it."
For example, the CEO may complain that a certain board member is difficult and demands a lot of detail. A little digging may uncover the fact the board member indeed wants a lot of detail because he or she doesn't understand why the organization's bottom line isn't better.
The steps Hull advises:
o Bring the conflict out in the open.
o Identify the behavior that indicates there is conflict.
o Realize that conflict can be productive if it brings the organization closer to its goals.
"There may be a blind spot," Hull said. "The CEO may not realize they are coming across as harsh or are not accessible or do not return phone calls. You usually hear something like, 'Well, there's poor communication.' It's important to drill down and find out what we're really talking about. Rarely do I find it's one-sided."
Brent Filson at Action Leadership agreed with Hull that the number of strong disagreements between CEOs and boards has increased. He believes CEOs who want to get the board behind their proposals need to deliver what he calls leadership talks.
"My experience is CEOs are really communicating through presentations and speeches instead of leadership talks," Filson said. "Presentations and speeches communicate information. Leadership talks not only communicate information. They help that leader establish deep, human, emotional connection with that audience."
Let's assume you're the CEO of Acme Widgets Credit Union. Although over the years you've acquired a few SEGs, the widget company is still the core of your membership. Now there's a problem, and the widget industry is being hit hard by new technology while demand for widgets is shrinking. You believe if the credit union is going to prosper, it's time to adopt a community charter and a new name.
"The board and the CEO must agree on the stakes," Filson said. "What will happen if we don't make this change? What are the stakes if we do make this happen? Until the CEO and the board agree on the stakes, the board will not be your cause leaders. You have to transfer your beliefs to the board. They have to understand what actions they can take."
"If a CEO is going to give a successful leadership talk, he must ask three questions. What does the board need? How can I transfer my beliefs to the board so that they not only understand, but are as motivated as I am? What action can those board members take as cause leaders to make the change happen?"
Filson advises CEOs to keep in mind what he calls the 20-60-20 rule. Twenty percent of the board will not believe in what the CEO is saying. Another 20% will automatically buy in. Sixty percent are in the middle. The CEO must win over at least a good portion of those in the middle as well as the 20% who don't want to do anything.
"Those people cannot be left alone," he warned. "They will be cause leaders themselves against the CEO."
If the board and CEO cannot agree on the business model, Filson continued, that will flow through the entire organization. So the CEO must not only talk about the business strategy he will follow to implement the new business model. He must also talk about the leadership strategy he will use to motivate the organization to get behind that strategy.
"You might have the board on your side. You might think it's a great strategy. But if you don't motivate the leaders of all ranks and functions, it's not going to happen as effectively as it can," Filson of Action Leadership explained.