I opened the “Hit the Ground Running With Your New Board” webinar I recently presented for the New York Public Transportation Association by describing two “facts of life” in the public transportation business: that surviving and thriving as a CEO depends on a rock-solid board-CEO partnership; and that this critical partnership is difficult to build and in the best of times fragile. Indeed, I’d say that board-CEO relations is pretty treacherous terrain even for seasoned CEOs, much less for brand new CEOs who’ve never worked with a board. One of the challenges that all CEOs face is the plethora of bad advice floating around about the board-CEO partnership. The December 16 post at this blog, “Surviving and Thriving With Your First Board: 3 Tips for CEO-Aspirants,” advises any executive aiming for the top spot to be “a super-cautious consumer of governance wisdom so that you don’t become the unwitting victim of bad advice,” citing an especially egregious example: the assumption that stellar transit authority performance will, alone, keep the board-CEO working relationship healthy.
In keeping with this blog’s mission to provide CEOs and CEO-aspirants with really sound, thoroughly tested guidance in board-CEO relationship maintenance, I’d like to share two more tips that have proved to be professional life-savers for newcomers to the CEO suite: (1) Make sure you have a detailed understanding of the governing function; and (2) Make turning your board members into really satisfied OWNERS of their governing work a top priority.
Of course, if you don’t have a firm grasp of what governing work is all about, you can’t really transform your board members into committed, satisfied owners of that work. In that regard, in recent years, it’s become pretty widely accepted that when a board governs it essentially makes a never-ending stream of decisions about concrete governing “products” – for example, adopting an updated mission statement or the annual operating plan and budget, and of judgments based on performance reporting – for example, that expenditures are on-track based on the quarterly financial report. A really board-savvy CEO will dedicate lots of time to designing processes for engaging her board members in getting these decisions and judgments made in a fashion that will promote feelings of ownership.
In my NYPTA webinar, I gave the example of the annual operational planning/budget development process as powerful vehicle for transforming board members into owners of their governing work. Many transit CEOs way back when would send their board a finished operating plan/budget to thumb through before adoption. The potential for satisfaction and ownership? Virtually nil. More commonly these days, transit CEOs work closely with their board’s planning committee to identify practical opportunities for meaningful board engagement in shaping the operating plan/budget. For example, many transit authorities engage board members in a special work session early in the planning process focusing on the identification of important operational issues that deserve special attention in developing the operating plan/budget for the next fiscal year and on the analysis of anticipated major new expenditures.