The Relationship Between the CEO and the Chairman

This may sound obvious, but it is not always true: the CEO and Chairman of the board of a major company must have good chemistry with each other…meaning they must connect and communicate well. Further, they also need to be strategically aligned with each other and the entire board of directors. (The assumption here is that the CEO and Chairman are two different people; in some companies they are the same.)

I was involved with a multi-billion dollar company awhile ago where the CEO was recently fired. Yes, there had been moderate strategic and sales issues in the company for quite some time and many in the management team had been dissatisfied with the communications skills of the CEO, despite major training investments to correct the problem. But after the termination, I was very surprised, when talking with the CEO one-on-one, to hear him say: “I never really had a great rapport with the Chairman from the very beginning.” That fact alone had to create significant discomfort at board meetings and even outside such meetings.

One has to wonder, when the stakes are so high, what the selection process was and how carefully the skillsets and personality were examined. The person selected for a CEO position has to be a perfect fit and there has to be the potential for a true partnership.

Last December I attended a CEO Conference, “Challenges to Global Growth,” sponsored by CHIEF EXECUTIVE Magazine. One of the speakers emphasized that too many boards are hooked on PowerPoint presentations and don’t communicate on the issues they need to address face-to-face. I can just imagine the criteria for the CEO being presented to the board that way, with little focus on one-on-one interaction among the CEO-to-be and the board members.

The speaker also noted that boards are often too insular. “PowerPoints should be read in advance,” he said. “Boards are there for discussion and challenging the CEO. It’s all about communications, strategic alignment and understanding the marketplace.” He added, for example, that boards of retail operations should be asked to shop monthly in the stores so they experience the service. I would add that light socializing with the chosen CEO candidate should also be fundamental. Great companies are made from great relationships.