How CEOs Can Take Back Authority From A Controlling Board Of Directors
Sometimes, even the boss has to deal with a boss.
A CEO’s relationship with his or her board of directors can be challenging, especially if he or she built their own company from scratch and are used to having the final say. Any time you put driven, hard-working, strong-willed people in a room together, differences of opinion are inevitable. But how do you keep those varying points of view from escalating into real conflicts, especially over big decisions like replacing C-suite talent?
It’s important to remember that even the most active and well-intentioned board members aren’t overseeing the day-to-day operations of the company. That’s your job as the CEO. You have perspective and vision that the chairman can’t share from a seat in the boardroom. If you’re getting pushback from your board about a key decision, try using these two strategies to support your case. Make the necessary change, and make BIG happen:
Two Strategies to Take Back Authority
1. Let the numbers talk for you.
Effective companies set big goals, put actionable, measurable steps in place to hit those goals, and track their stats. At the micro level, these numbers help keep your employees motivated and focused on key tasks. At the macro level, if you’re measuring the right numbers, yet your arrows are trending in the wrong directions, then it should be obvious to everyone in that board meeting that a shakeup is necessary.
Your numbers are the facts. While your chairman may love the longtime head of sales, whom you know needs to be replaced, failed targets are hard to argue with. Tactfully remind the board of your shared key objectives and how they’re not being met.
You might say something like, “Look, you said these targets are important to you. We can’t achieve them as long as this person is on my team, so do you want to keep the existing team intact or do you want to go for these targets? Your choice, executive chairman.”
Yes, it’s bold. But you’re never going to make it to chairman of the board yourself someday by being weak.
If your chairman responds, “I want the guy on my team,” then you can say, “Okay, let’s re-evaluate these targets because they’re not attainable. We need to define new ones.” This still leaves your chairman in control, gives him or her all the facts, and it doesn’t come across like you’re trying to mount an insurrection.
Now, that all sounds nice and logical. Unfortunately, it doesn’t always work. Board members are humans too, and they are subject to strong emotional biases that may cloud clear, logical thinking. You could present the most logical, compelling business case for a particular course of action, but still get shot down by the board because emotions can distort the facts. In fact, they might take your boldness and shove you right out the door.
Then what do you do?
Well, you could skip the first strategy and go straight to what I think is the most effective way to handle a controlling board member.
2. Get clear on the rules of engagement.
I learned this strategy from my coach who is a former West Point guy. He always said you have to go straight to the horse’s mouth and agree on the rules of engagement. You have to understand your scope of authority as the CEO. What are you empowered to do and decide, and what is left to the board to decide?
I learned this lesson a second time in my own business. One day, my top guy came to me and said, “Mark, see these pants? These pants aren’t big enough for the two of us, so back off.” I got the message, gave him the room to run his part of the business, and we all thrived.
If you and the board are not clear on your level of decision making, have the discussion now before an issue rears its ugly head.
This clear rules of engagement strategy works not only for a CEO to Board of Directors relationship, but for all other relationships throughout your C-suite too. For example, it works for CEO to CFO, CEO to COO, CEO to VP of Sales, and so on.
Ultimately, the success or failure of a business rests on the CEO’s shoulders. But if you can work well with your board—and your C-suite can work effectively with each other—you can harness that top-level experience and passion, and focus it on your big goals to make the journey from a big vision to a big reality that much smoother.
Article Originally Published on Forbes.com.
About Mark Moses
Mark Moses is the Founding Partner of CEO Coaching International and the Amazon Bestselling author of Make BIG Happen. Mark has won Ernst & Young’s Entrepreneur of the Year award and the Blue Chip Enterprise award for overcoming adversity. His last company ranked #1 Fastest-Growing Company in Los Angeles as well as #10 on the Inc. 500 of fastest-growing private companies in the U.S. He has completed 12 full distance Ironman Triathlons including the Hawaii Ironman World Championship 5 times.