WHEN BOARDS MUST BUTT OUT


I am CEO and feel that my board is too involved in operational issues. I am constantly doing things for the board instead of doing the right things for the company. What’s your advice?

This is difficult position to be in but it is one in which many chief executives find themselves. The key issue is to be clear about what the board role is. The board is there to govern not to manage.
This covers establishing ethical and global operational policy but then letting management operate freely and innovatively within these agreed guidelines. It also means agreeing the strategic direction of the organisation but then letting management develop effective short and medium term business plans and budgets to implement the agreed strategy.
It also means measuring the progress and achievement of these strategic goals but leaving management to action and measure the detailed operational achievement of the business plan.
Sometimes boards can become strongly involved operationally due to some crisis, such as sudden and unexpected market downturn, or through loss of confidence in their chief executive officer.
I suggest, as start, you check that you have the full support of your board by discussing the issue with your chair. If the chair assures you that you have their confidence then you will have opened up the way to have further discussion with the board regarding your concerns about the boundaries between the board and management. This feedback should prompt the board to re-evaluate its own protocols and hopefully get back to focusing on its governance role.
If you find out that you haven’t got the board’s full support then you need to start working out where you next want to work.



I only measure the key performance indicators of my managers as I believe that is all that is important. I have been told that this is not good enough. Who’s right?

There is rule in life which is that you get what you measure. Measuring just KPIs will result in the achievement of goals but at what cost? In today’s world it is very important to measure both achievement of objectives and also how those objectives are achieved. The ‘how’ is related to behaviour.
The reason for this double focus in performance management is that the most cited reason for people leaving their job is because of their manager and his or her behaviour towards the staff member. If the manager behaves in bullying or autocratic way they may still achieve high results from their team but people will not be fully engaged and will be dissatisfied and leave.
The culture will also follow the role modelling of the manager in the long run which in the end will become dysfunctional. Therefore, it sounds like someone is trying to give you some good advice.
So, yes, definitely measure KPIs but also measure and give feedback on behaviour. You can use tools such as 360-degree feedback to do this effectively.

Kevin Gaunt, FNZIM, FAIM, is CEO of NZIM Auckland and has been senior executive with, and consultant to, some of New Zealand’s largest companies.

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