The CEO Guide to Boards

To help CEOs and board chairs, as well as executives and directors, build strong boards, this CEO guide synthesizes multiple sources to make quick sense of complex issues in corporate governance, while focusing on four areas that are essential for building a better board.

CEO Transitions: The Science of Success

New CEOs are faced with a bewildering array of choices, so it’s crucial for them to take a data-driven look at potentially major moves—and to know when to make them.

Five Questions Boards Should Ask About IT in a Digital World

With a higher degree of digital fluency, boards can help C-suite leaders make better decisions about how to expand a company’s most successful technology initiatives and when to pull the plug on lagging ones. In our experience, board directors are more likely to gain such fluency if they routinely ask these five critical questions relating to the IT organization’s performance.

Toward a Value-Creating Board

The amount of time board directors spend on their work and commit to strategy is rising. But in a new survey, few respondents rate their boards as effective at most tasks or report good feedback or training practices.

How to Accelerate Gender Diversity on Boards

Slow progress in adding more women to boards has dominated the conversation. But tips from standout companies are more likely to inspire others to take firmer action.

The $112 Billion CEO Succession Problem

Poor planning for changes in leadership costs companies dearly. Getting it right is worth more than you might think.

How Boards Should Evaluate Their Own Performance

The New York Stock Exchange requires that the boards of all publicly traded corporations conduct a self-evaluation at least annually to determine whether they are functioning effectively. Our research suggests that many board evaluations are inadequate. How can boards better evaluate the performance of directors? Any thorough evaluation should assess the following.

Seyi Fabode

You shouldn’t be CEO if you say ‘I only work with people smarter than me’ and you do not truly mean it. That being said, and this part is often not said enough, you should be smarter than everyone else on your team in one thing. It does not matter what it is, as long as it enables you to inspire the people who commit … [ Read more ]

Jacques Neatby

CEOs have always had to address conflicts between team members. But this task has grown as each new member comes aboard with a strategy to implement and an expectation that their priorities supersede all others. Health & Safety executives admonish peers who don’t put safety first. Talent executives insist colleagues make “people” their priority or risk an exodus of the best and brightest. Digital executives … [ Read more ]

How the Best CEOs Differ from Average Ones

We all know the stereotypes: Great CEOs are extroverted. They’re self-promoting. They’re risk takers. But are these stereotypes true? Which traits actually differentiate CEOs from other executives? And, most important, which attributes separate successful CEOs from other CEOs? Russell Reynolds Associates, in partnership with Hogan Assessment Systems, has led a research effort to separate myth from reality, identifying key indicators of leadership that have a … [ Read more ]

Lou Gerstner

I think that private-equity activity tends to come at the end of the corporate cycle, when a company is already in trouble, has been mismanaged, or is an orphan in need of new leadership. So private equity is another outside agent that comes in when management has failed to do what it needs to do.

Fred Wilson

I asked [an experienced board member] “what exactly does a CEO do?” He answered without thinking:

“A CEO does only three things. Sets the overall vision and strategy of the company and communicates it to all stakeholders. Recruits, hires, and retains the very best talent for the company. Makes sure there is always enough cash in the bank.”

I asked, “Is that it?” He replied that the … [ Read more ]

Agreeable vs. Disagreeable CEO: Who Do You Want at the Helm?

An executive’s character traits are linked to certain patterns in a firm’s investments, strategy decisions, and overall performance, a new study finds.

The Ballooning Executive Team

Executive teams replete with functional experts (CFOs, CHROs, etc.) are so common today one forgets they were not always the norm. By some accounts, the average team size for large firms is now 10, double what it was 30 years ago. Although larger teams theoretically bring benefits, such as a diversity of perspectives, practical downsides have grown with team size. So what can a CEO … [ Read more ]

Christian Casal, Christian Caspar

Governance arguably suffers most […] when boards spend too much time looking in the rear-view mirror and not enough scanning the road ahead.

J. C. de Swaan and Neil W. C. Harper

Since standard stock options don’t differentiate between value created by external factors and individual performance, investors may be shortchanged and CEOs may be rewarded regardless of merit and top-performing CEOs may be penalized if their tenure coincides with a bear market. Indeed, McKinsey research shows that from 1991 to 2000, market and industry factors drove about 70 percent of the returns of individual companies, company-specific … [ Read more ]

How to Gauge a C.E.O.’s Value? Hint: It’s Not the Share Price

Everybody knows that chief executives receive bounteous pay as a matter of course. Less discernible, though, is who actually earned their pay the most by increasing the value of the companies they run by a commensurate amount. Such performers are not to be confused with executives who work to propel their company’s stock price.

The most common performance metrics used by companies can be problematic. … [ Read more ]

Zhang Ruimin

Jim Collins and Jerry Porras wrote in Built to Last: Successful Habits of Visionary Companies that many great chief executives are “time tellers.” They create great products and services, but their value lasts only as long as they are personally present. Senior executives should be more like “clock builders”: focused on making a great company—a company where people think as entrepreneurially as the leaders do, … [ Read more ]

Stop Paying Executives for Performance

For chief executives and other senior leaders, it is not unusual for 60-80% of their pay to be tied to performance – whether performance is measured by quarterly earnings, stock prices, or something else. And yet from a review of the research on incentives and motivation, it is wholly unclear why such a large proportion of these executives’ compensation packages would need to be variable. … [ Read more ]