Why the Board Chair Should Not Interpret the Board’s Directives to the CEO?
- Posted by Richard Stringham
- On January 13, 2022
- Any Reasonable Interpretation, Board Chair Role, Board Communication, One Voice
When I first began governance consulting, I often ran into a misconception that the Board Chair was the CEO’s boss. I don’t encounter that nearly so often these days; but an odd remnant of that view still pops up – some think that the Chair should be the board’s spokesperson to the CEO.
If I understand that sentiment correctly, it is built on a desire to improve communications between the board and the CEO. In other words, by having the Chair convey the board’s directions, some think of it as an opportunity to engage in a healthy dialogue. The CEO not only receives direction but also has the opportunity to probe and seek clarity to better understand the board’s intent.
Indeed, our understanding of healthy communication between two parties suggests that such practices would lead to better understanding. Whether it is supervisor and employee, marital partners, or parents and children, dialogue usually makes communications clearer.
However, there is a major flaw in this scenario: the two parties should be the board and the CEO; not the Chair and the CEO.
Perhaps you’ve heard of the “One Voice Principle” in governance. This is the concept that the board has only one voice; it is not a collection of individual directors’ voices. Of course, when deliberating, individual directors contribute to the collective thinking of the full set of board members. Although that helps to inform their perspectives, such deliberations are not the board’s singular voice.
The board’s one voice is only discernable in an official decision of the board. That decision must be on the basis of its decision threshold (e.g., majority vote, consensus). If a majority is required, then a vote of five in favour and four opposed carries exactly the same weight as a unanimous decision.
Key here, is that the board’s decision is the adopted motion or resolution which is recorded in the minutes of the meeting.
Consequently, I cringe when I hear board members say: “Well the wording of the motion doesn’t quite cover the direction we want to give, but the CEO has heard the discussion and she knows what we mean.”
How can the CEO know the will of the board if it was not agreed to in an adopted motion? Should she make her decision based upon the perspectives of Raoul and Gwen? Or should she do so based upon what she heard from Cynthia and Edgar?
If the board’s direction can only be its recorded decisions, then whether the CEO knows the content of the board’s deliberations that led to its decisions is not relevant to her reasonable interpretation of the decisions. That’s right – the CEO can only be accountable for the board’s recorded decision; she cannot be expected to act on the conversation that led up to it.
On the other hand, having the CEO in the room during deliberations is healthy because she can provide input to inform board members as they contemplate the issue.
If the board’s decision can only be in a recorded motion, what value can the Chair bring by interpreting the board’s decision only to have the CEO interpret the Chair’s interpretation? The answer is: “None! The Chair only adds an unnecessary layer of distortion.”
Therefore, inserting the Board Chair between the board’s one voice and the CEO does not add value. Instead, it creates further distance between the board’s one voice and the CEO.