108. Hiring a CEO is not the same as good governance

I often hear people say that hiring the CEO is the most important thing that a board can do. Still, even doing a great job at hiring a CEO isn't the same thing as good governance.

Background music is Of the Stars by KC Roberts & the Live Revolution

 

SCRIPT:

I had originally planned to do an episode later this season called “Is hiring and/or firing the CEO really the most important thing a board does?” and maybe I still will, but I feel like this topic fits nicely in the sequence we’ve got going on right now. The idea that a board’s most important job is always to choose the right CEO kinda bothers me. I think the problem is that it seems like such a lazy, unambitious concept of what makes boards valuable. And also puts too much emphasis on one element of good governance – an important one, at that – but still just one piece. If I were trying to describe my ideal board of directors, it wouldn’t sound anything like “you better hire the perfect CEO, and if you don’t…you better fire them quickly and make sure the next one is perfect.” As far as I know, most CEOs are just people. Some people are exceptional leaders of people OR projects. Very few people are exceptional at both. Regardless of what your CEO is great or awful at, don’t you think that what differentiates an average board from a great board might be its ability to help to activate the CEO’s superpowers, and provide a bit of air cover around the CEO’s weak spots – however tiny they might be? Sure, every board needs to take the selection of the CEO REEEAAALLLY seriously, and to be courageous enough to fire the CEO when it’s time to go in a different direction. But the *most important part of a board’s job*? I’m not so sure about that.