Tip #78 Should the CEO Seek Advice from the Board?
A CEO seeking and/or receiving advice from the board can be a tricky matter. When someone in authority communicates with someone over whom they have authority it can be difficult to distinguish between advice (which can be ignored) and directives (which must be followed). Such ambiguous communications can undermine effective board delegation, effective CEO accountability, and trust in the board-CEO relationship.
Some guidelines may be helpful here.
1. The board and the CEO need to be clear about what the board is directing the CEO to do, clear about what performance expectations for the CEO have been set by the board. (In the Policy Governance® model, these expectations for the CEO are determined by the full board and are incorporated into official board policies. Ends policies define what the CEO is required to achieve while Executive Limitations policies define the limits on the range of authority delegated by the board to the CEO.)
2. The board and the CEO need to be clear about what matters the board is delegating to the CEO and the range of discretion the board is allowing the CEO in addressing board-delegated matters. (In the Policy Governance® model, all operational matters are delegated to the CEO except those retained by the board. In addition, the board allows the CEO to do or allow anything that is not prohibited by the board through board Executive Limitations policies which define the boundaries of CEO authority, the range of discretion allowed to the CEO.) If there is clarity about the board’s performance expectations for the CEO, about what matters are being delegated to the CEO, and about the range of discretion allowed to the CEO, it is less likely that the board will drift into unproductive, potentially destructive, advice-giving.
3. The board should consider formally adopting the group authority principle which states that only the board as a whole is able to provide authoritative direction to the CEO. A corollary of this principle is that the CEO does not recognize the communications of any individual board member as providing authoritative direction. (The principle of group authority, also known as the board one-voice principle is one of the ten principles of the Policy Governance® model.)
4. The CEO should feel free to seek advice from anyone he or she feels can provide helpful information, including board members.
5. If the CEO wishes to ask individual board members for their advice, it is advisable that this occur outside of board meetings. If the CEO seeks advice from the board or individual board members during a board meeting, it may be quite difficult to differentiate between advice and direction especially if it seems that the advice is coming from the whole board. (In the Policy Governance® model, as mentioned above, authoritative direction from the board to the CEO comes only from the board as a whole as official decisions of the full board. So, advice from individual board members is clearly advice and not a directive and as advice, it can be disregarded by the CEO.)
6. While the CEO should feel free to seek advice from anyone, it is suggested that it remain clear that the CEO is accountable to the board for all decisions he or she makes. (In the Policy Governance® model, it is clear that if the CEO gets advice that turns out to be bad advice, even from board members, the CEO is still accountable to the board for decisions he or she has made.)
7. It is suggested that the board should go on record (ideally, through official board policy) that the CEO is free to reject any advice offered by individual board members to the CEO and that directives from the board to the CEO only occur as official decisions of the full board. (In the Policy Governance® model, it is spelled out in board policy that only the full board through its official decisions provides direction to the CEO. The CEO and board members know that individual board members have no authority to direct the CEO and any advice individual board members offer to the CEO can be ignored if the CEO so wishes.)
8. In the Policy Governance® model, all decisions made by the CEO are considered pre-approved by the board as long as they do not violate board Executive Limitations policies, that is, as long as they do not embrace anything prohibited by the board. CEOs may be tempted to seek advice from the board to avoid the “heat” of potentially controversial decisions. CEOs should refrain from such advice-seeking and boards need to step up and actively support CEO decisions made that are compliant with their board policies.
(See John Carver and Miriam Carver, Carver Policy Governance Guide: Adjacent Leadership Roles: CGO and CEO. Jossey-Bass, 2009, pp. 27-29.)
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