Tip #60 Who is the Boss of the CEO?
In our last two Tips for Effective Boards, we discussed the first two of the Ten Principles of the Policy Governance® model of board operations. We now turn to the third Policy Governance® principle, the principle of Board Holism or the Group Authority of the Board.
“Board Holism: The authority of the board is held and used as a body. The board speaks in one voice in that instructions are expressed by the board as a whole. Individual board members have no authority to instruct staff.” (“Policy Governance® Source Document” produced by the International Policy Governance Association in consultation with John Carver and Miriam Carver, 2011: https://www.BoardsOnCourse.com/policy-governance.
So, in answer to our question “Who is the boss of the CEO?” the boss of the CEO is the board as a whole. No individual board member, not even the board chair is the boss of the CEO. Only the board functioning as a collective body or group has authority over the CEO, that is, as stated in the Policy Governance® principle, “The authority of the board is held and used as a body.” The board as a whole directs the CEO and holds the CEO accountable for complying with its directions.
While this principle may seem obvious, my experience is that many boards do not appear to really appreciate what it means to embrace it. When it is practiced, the CEO receives one set of clear official directives from the “board as a whole” and does not receive competing or conflicting directives from multiple sources within the board. Individual board members realize that they have no authority to tell the CEO (or staff) what to do but need to interact with each other to craft expectations for the CEO that are officially approved by the “board as a whole.” Expectations of the board for the CEO are thus unified and clearly defined. Since the board’s expectations of the CEO are clear and embraced by the whole board, accountability of the CEO to the board is enhanced. This principle, when embraced and practiced by the board avoids potential confusion and conflict about expectations for the CEO.
Board instructions or directives are expressed by the whole board for the CEO and for the board itself. In Policy Governance®, board instructions to the CEO include Ends policies (results to be achieved for designated recipients for a justifiable cost) and Executive Limitations policies (boundaries within which the CEO is authorized to make decisions and take actions). Board instructions to the board itself include Governance Process policies (internal board operations) and Board-Management Delegation policies (defining the board relationship to the CEO).
The “wholeness” of the board also means that within the board the chair is not the boss of the other board members, but “servant-leader” of the board, a “first among equals” chosen by the board and accountable to the board to ensure the integrity of the board’s process and to assist the board in living up to its expectations of itself.
When board committees are used, they do not undercut the “wholeness” of the board by having their decisions rubber-stamped by the board. Board committees study issues for the board and help it assess the pros and cons of various options. They share what they have learned with the board so that board members have the knowledge they need to make informed decisions about matters before the board. If matters are important enough to be decided by the board, all board members should have the knowledge they need to make informed decisions and not defer to committee recommendations about which they have little information.
Just to be clear, when the Policy Governance® principle says “The board speaks in one voice…,” one voice does not mean that board decisions have to be made by consensus, that is, that everyone has to agree. Rather, it means that when the board makes an official decision (which can be by consensus or by vote), an official board decision is the one voice of the board.
For additional information about this principle, please check out Tips for Effective Boards #14 (Group Authority of the Board) and #9 (Embrace the Group Authority of the Board): https://www.BoardsOnCourse.com/blog.
To see all ten principles of the Policy Governance® model, please click https://www.BoardsOnCourse.com/policy-governance and then click The Principles of Policy Governance® on the left-side menu.
This is my 60th monthly Tip for Effective Boards. So, I’ve been doing this for 5 years. How time flies! I hope you have been finding these Tips useful. If you have any suggestions for governance questions or topics that you would like to see addressed in Tips for Effective Boards, please let me know. Also, your comments are always welcomed and appreciated. You can always respond to the monthly Tip email message or email me at email@example.com.