A smooth-talking CEO has mastered the art of telling the Board what it wants to hear: “There is nothing to worry about. It was handled this morning,” or: “It’s not complicated. It will get done this afternoon.” Diligent Board members discover later that nothing got done and that the smooth talk may be a cover for incompetence or negligence. When confronted, the CEO responds with further excuses, and a majority of the Board is content to believe him. In another setting, the Board is made aware of low staff morale and allegations of verbal abuse and harassment from the CEO or some managers. When questioned about it, the CEO reacts defensively: “You’re micromanaging me now. The Board’s role is to set policy, and my role is to implement it. Don’t worry. Just let me do my job. Everything is under control.” The Board acquiesces.
POTENTIAL DAMAGE
As concerns persist, trust diminishes. Perceptions of stonewalling and deception grow. It seems like the CEO has built an unchallenged empire, using glib replies and lofty governance theories to avoid scrutiny and thereby maintain substandard performance. If as in the second setting described above, staff members are indeed treated inappropriately, they are likely to be distracted from their work and perform at a fraction of their capacity. There is increased risk of staff resignations or even court actions for bullying and harassment by the CEO or some managers.
INTERVENTION
Given that the Board is ultimately accountable for the organization’s performance, it must not allow legitimate concerns to be dismissed by the CEO as micromanagement. If the Board suspects deception or incompetence, it should be less concerned about governance theories and organizational charts and more concerned about risk management. In such cases, the Board must become less detached and trusting and more hands-on. It must demand full disclosure, accountability, honesty, and performance to high standards. If such performance is not forthcoming, the good of the organization may require the Board to replace the CEO.
