What are the warning signs of brewing boardroom coup?
1. Watch the board’s “sparkplug” director
Many boards have respected lead director, someone with the power and savvy to organise and lead CEO coup.
The survival-minded CEO, will make friends with this boardroom power centre, and seek their early buy-in on strategies — especially those with high risk.
2. The board needs manager support for coup
Corporate boards can’t usually act alone. Legal, finance, investor relations and other top executive intelligence are needed to provide numbers, know-how and strategic skills. Some CEOs have nipped such behaviour by keeping top executive ranks in such turmoil that directors can’t build useful links. It’s far wiser for the CEO to concentrate on building strong relations within the board than trying to isolate them.
3. Listen for rumblings from outside powers
A third element is often needed for an effective move against the CEO — large, hard to ignore (and unhappy) group of spear carriers. Usually these are big shareholders or employee groups. CEO might make major cuts but fail to sell them to workers. Morale drops and union moves will shake the board’s confidence in their CEO. The savvy CEO response is to ensure solid employee and investor relations before facing hard cuts or patch of bad results. solid CEO vision, well explained, helps the CEO hang on to the board, and ultimately become hero.
(From 21st Century Board by Ralph D Ward.)
