|Grace under pressure
There are many virtues attributed to an effective Board; an open and communicative culture, transparent information flows, strategic vision, attention to detail, to name but a few. But one of the less obvious virtues, described by Hemmingway as ‘grace under pressure’, and one which is critical in order to thrive, is courage. For the CEO, who already has a vision and a strategy for the organisation, it is the ability to welcome challenge from executives and non-executives, and to change course, sometimes contrary to personal interest. For executives, it is the readiness to admit mistakes, escalate issues, or disagree with colleagues, and for non-executives, to speak out, often in isolation, or to keep digging. But the role which demands the most courage is the Chair.
The Chair has to balance between the executives and the non-executives, managing the most difficult Boardroom issues, and working with the most powerful personalities. For example, CEOs are usually charismatic and articulate leaders, with strong views and opinions. They can be forceful when presenting an opportunity, and influential in their judgements. Their view of the Board, collectively and individually, will inevitably set the tone for ExCo. And naturally, successful CEOs have strong support, often publicly, from shareholders, stakeholders, and colleagues.
The quality of the relationship between the Chair and the CEO is critical; Chairs and CEOs spend more time together than with other Board members, working closely on strategy, execution and succession. It is a relationship which can only thrive on mutual trust and respect, and the correct balance of challenge and support. But there can be issues. CEOs can stay too long and lose their fresh perspective, or because of their success become defensive and arrogant, or hungry for power and remuneration. And in building a relationship so mutually dependent, and occasionally over long periods of time, the Chair can become too close, tempted to take the easier option of support rather than challenge, and consensus over conflict.
In order to manage this relationship effectively, the Chair needs courage. Courage to support the CEO when shareholders, stakeholders and the media are losing confidence, or to discourage the execution of misguided strategies (often against the enthusiasm of advisors). Courage to evaluate the CEO’s strengths and weaknesses in an open and honest conversation, and perhaps most importantly to plan CEO tenure and succession, recognising when the organisation needs a new or different leader.
There are other Boardroom issues. The non-executives, who are chosen for their experience and expertise and diversity of thought, expect to be given appropriate airtime and influence by the Chair, and assume that they will enjoy their colleagues’ trust and respect. But the role is becoming increasingly complex and demanding, and not all non-executives add value, or become team players, or give the necessary time and commitment, or remain relevant, or respond well in a crisis. The Chair needs the courage to guide and shape individual contribution, to resolve conflict, mistrust and lack of respect or understanding between executives and non-executives (most often arising in the RemCo), and, occasionally, to decide not to renew an individual’s term, or ask them to leave the Board early.
Stakeholders also have powerful voices, shifting appetites for risk, and different timelines. Shareholders, government departments, and regulators, inter alia, can demand adjustments from the Chair to strategy and risk, to executive leadership and Board composition. It takes courage to support the executives in the face of external criticism, weak short-term performance, or changing circumstances, and to say no to external pressure for changes which have not been ratified by the Board, or for additional information, particularly when personal and professional reputations are at stake.
But the greatest courage is often needed when thinking about one’s own tenure. Chairs can overstay their welcome, jeopardising their independence and their objectivity, becoming too close to the executives, too familiar with the organisation, and too comfortable with the Board. This is particularly true when the organisation is successful, when there is a period of transformation, or when the position is likely to be the last chairmanship in a lifetime of achievements. And there are always good reasons to stay – organisational change to oversee, corporate transactions to be executed, crises to manage. It takes courage, as well as humility, to know when it is the right time to go.
For effective Chairs, courage really is grace under pressure.
Dr Tracy Long is the founder of Boardroom Review, which was established in 2004 to give independent advice on the effectiveness of the Board and its Committees. Tracy has conducted over one hundred and fifty evaluations across PLC, mutual, privately owned and public sector organisations in the U.K., the U.S. and Europe. She currently serves on the Board of the Department of Culture, Media and Sport, where she is Chairman of the Audit & Risk Committee, and a member of the Remuneration Committee. She advises the Efficiency and Reform Group (Cabinet Office) on the effectiveness and evaluation of Ministerial Boards. She is an advisory director of Carnegie Hall, and a council member of Marlborough College.