There has been, and continues to be, a great deal of discussion of the roles of the Board and the CEO, particularly in a scenario where the CEO is an Executive Director. Should the roles be complimentary or should they be of a ‘hide and seek’ nature? Some argue that too many Boards are so passive that their CEOs run rings around them, given that most Board members have time constraints and at times, limited knowledge and other limitations. This post is an attempt to unpack these issues.

Best Practice

Best Practice is that the roles of the Board and the CEO should be complimentary with the CEO initiating and recommending to the Board most of the new innovations in the organisation and the Board considering the CEO’s recommendations and either approving, modifying or turning down the recommendations. It should be noted that the Board’s primary role is to ensure the organisation’s survival and sustainable growth by directing the organisation’s affairs while meeting the appropriate interests of its shareholders and relevant stakeholders. The CEO on the other hand, is the key Management leader of the organisation who oversees the day-to-day running of the organisation, passionately implementing Board decisions.

Lo and behold, instead of complementing the Board, some CEOs are known to be playing hide-and-seek with the Board with disastrous consequences to the organisation.

About Complimentary Roles

Below is an exposé of areas where the Board and the CEO should complement each other, bearing in mind the relationship between the Board and the CEO should be a working partnership.

Board Composition

It is the responsibility of the Board to select, appoint and induct new Board members with the CEO providing administrative support through the Company Secretary.

Board Governance Systems

The Board lays the foundation for effective Board leadership by putting in place such board governance systems like the Board Charter, Board Code of Ethics, Board Code of Conduct, etc. The CEO should provide advice and support as necessary.

Board Learning and Development

Board and Director capacity building falls squarely on the Board’s lap and the CEO should provide the necessary advice and support, including recommending consultants that do a professional job in this area.

Strategic Planning

Here the CEO and other members of the Senior Management team have the primary responsibility of crafting the organisation’s Strategic Plan, recommending the plan to the Board. The Board questions the key assumptions and approves the plan, as necessary.

Board Meetings/AGMs

The Board largely undertakes its corporate control and fiduciary duties through Board meetings and AGMs. The CEO should provide the groundwork for such meetings. This inter alia includes:

• Recommending the agendas for the meeting;
• Ensuring all financial statements are in place;
• Provision of the CEO’s reports on the performance of the organisation;
• Ensuring Board Committees reports are in place;
• Ensuring Board/AGM packs are in place and distributed to Board members in time;
• Ensuring the external audit is done in time for the AGM; and
• Recommending the agenda for the Board/AGM.

Board Financial Oversight

One of the key functions of the Board is to provide financial leadership to the organisation so as to proactively prevent financial haemorrhaging which can in turn, result in serious consequences to the organisation. The CEO’s role is to relentlessly focus on how best to support the Board in this endeavour.

About ‘Hide and Seek’

Largely driven by self-interest, some CEOs have a propensity towards playing ‘hide and seek’ with the Board. Below are areas where this tends to happen:

Board Composition

Some CEOs either handpick new Board members or seriously influence Board appointments. The idea here is for the CEO to have a critical mass of Board members in the Board that will extend favours to the CEO when certain Board decisions are made. For example, pay and other benefits, budgets, etc.

Board Governance Systems

Properly done, board governance systems bring transparency in the running of the affairs of the organisation. Some CEO’s attitude is ‘the murkier the better’. Instead of providing sound advice and support in this area, they advise against the adoption of these systems or just stall the adoption of the systems.

Board Learning and Development

Some people who serve on Boards are not too clear as to what their role on the Board is. Many know that they should be asking questions at Board meetings, but what questions? Board and Director capacity building corrects such sad situations. Some CEOs do not prioritise Board Learning and Development often because they are better off with Board members with limited knowledge.

Strategic Planning

How strategic is strengthening board leadership in any organisation? For CEO’s with the hidden agenda already referred to, this is not strategic at all, therefore they will not advise their Boards to make strengthening board leadership in the organisation an area of strategic focus.

Board Meetings/AGMs

This is one of the key areas where the Board gets compromised through some CEO games. Amongst the games some CEOs play to feather their nests include:

• Hiding critical information from the Board and/or presenting ‘sugarcoated’ reports;
• Putting agenda items likely to favour or disadvantage them, at the tail end in order for the Board to consider them when everyone is tired; and
• Influencing the appointment of External Auditors, or handpicking them, in order to have ready protection in Audit Reports.

Board Financial Oversight

One of the key tools used by Boards to provide financial leadership is to have policies in place covering key areas of operation policies such as:

• Board Members and Executive Compensation Policy;
• Systems and Internal Controls Policy;
• Human Resources Policy; and
• Procurement Policy.

According to best practice, such policies should be drawn up by the CEO under the supervision of a relevant Board Committee for approval by the Board. CEOs with hidden agendas often stall the drawing up of these policies, thereby creating loopholes in the system.

Many organisations have committed CEO’s who play their role in a professional manner but regrettably; there are a few bad eggs who play ‘hide and seek’ with their Boards, driven by self-interest.