In these unprecedented times the world is experiencing a level of turbulence not seen since World War 2. The health crisis that is now an economic one, will evolve into one of social inequality that may yet generate big changes politically.
This is putting many CEOs under great stress as they try and chart a course for their organisation, while operating in an increasingly virtual world.
Stress can lead to a range of behaviours including:
- CEOs closing down dialogue with the board and presenting “oven ready” decisions at board meetings, when the group and the organisation would be better served by a more powerful admission of “I don’t know all the answers here”. This could catalyse discussion and deliver better decision making.
- Uncertainty paralysis, with decisions not being made-increasing the risk of reactive rather than proactive decisions.
- CEOs focusing on what they think is important andnot on targets set by the board. Missing performance targets is a tell-tale sign they might be struggling to manage.
- CEOs focusing too much on the “present” in a crisis and not looking at the future direction. This can have negative long-term implications for their organisation.
A CEO displaying any of these stress-related behaviours is very concerning for any business. This is a time when CEOs need to be resilient, adaptable, demonstrate emotional intelligence and be future thinking. During this crisis they should also be identifying a once in lifetime opportunity to transform how their organisation operatesto ensure it thrives. A CEO under severe stress will be unlikely to achieve this.
Where CEOs are demonstrating stress-related behaviours, and even if they are not, it is critical the board always supports the CEO to ensure they are as effective in their role as they can be.
This requires the board to:
- Recognise the pressure CEOs are under – such as the toll on their mental health. It’s typical for CEOs to be under huge strain 24 / 7 during a crisis. They need to be encouraged to take breaks at regular intervals to recharge their batteries, which will aid their wellbeing,so they are fit to lead.
- Ensure they maintain “connectiveness” with the CEO. This means be available in this virtual world – particularly informally. It’s something that’s vital as working from homeprevents the traditionally important “watercooler” chats or a coffee outside the boardroom. It’s these interactions that help to build relationships and support effective decision making.
- The relationship between chair of the boardand the CEO is the most important relationship in the governance system. For a successful relationship between the two there must be honesty and candour, and while it’s important to be on friendly terms, they should never ever be seen as friends. The chairperson should always make sure the CEO knows they are available for informal conversations and support at any time.
- Boards should be not only supportive, but constructive and challenging where necessary to get the best out of the CEO. This involvesboards bringing CEOs back to focuson what they should be doing – delivering on the targets they have been set and adding value.
- After a very challenging 12 months boards must review the performance of the CEO.This will help provide assurance that they remain the right person for the role in the future and enable the board to spot opportunities to support them moving forward.Conversely,the assessment might reveal that the CEO is no longer the right person for the roleand needs to be replaced. To ensure the CEO evaluation process delivers a vital 360-degree performance review, one that provides an objective assessment, the board, CEO and their direct reports must reflect and provide feedback on the CEO’s performance and development needs. This involves qualitative and quantitative research based on an online survey and interviews on a videotelephony platform in current conditions.This assessment must be honest,impartial and strictly confidential with “psychological safety” for all participants paramount.
- At the end of the review process there must be clarity on the next steps for the CEO, with performance deliverables or training, for example, agreed by all parties. These can then be revisited and evaluated at a later date to check on progress and ensure the CEO is fit for the future.
However, it’s not all about the board providing support. CEOs must have self-awareness. They must honestly ask themselves if they are right for the organisation they lead today and into the future. They need to answer key questions, such as, “are they hitting their targets?” and “are they adding value to the business at this time?” It is good CEOs who will consider if they are coping well in the current crisis and if they need additional training, mentoring, experience or development, to ensure what they bring remains relevant and truly value adding.
After such a tumultuous year all boards want assurance that their CEO has the appropriate skills and is adding value, while effectively meeting their objectives. To help the CEO in these goals boards must recognise the signs of stress in the CEO at an early stage, and support them every step of the way. After all, it’s good governance.
One of the most important things the board can do in their pursuit of supporting the CEO is to undertakea review of their performance that identifies bespoke targets, support and development needs– something we are market leaders in delivering. Get in touch with us for more information on how we can help support your CEO and aid their effectiveness during these challenging times.
By John Harte, Managing Partner at Integrity Governance