The Effective Chair-CEO Relationship: Insights from the Boardroom

by Stephen Davis for The Harvard Law School Forum, March 17th, 2011.

The number of U.S. companies that separate the chairman and CEO roles is at a historic high: 40 percent of the S&P 500 now separate the roles, up from 23 percent a decade ago, according to Spencer Stuart. A new report published by Yale’s Millstein Center for Corporate Governance and Performance, The Effective Chair-CEO Relationship: Insight From the Boardroom, examines how this increasingly common relationship works. Based on interviews with CEOs, non-executive Chairs, and stakeholders, the report aims to understand what constitutes a winning relationship between two individuals, each successful in his or her own right. As this leadership structure becomes more prevalent, these insights should be useful to those working together in these interdependent roles.

The report identifies three major areas that describe the characteristics of an effective working relationship: good chemistry, a clear framework, and a supportive context. Most commonly mentioned was good chemistry – the direct interpersonal relationship between the two. Expanding on the chemistry headline, Chairs and CEOs identified effective communications as an underlying factor. Effective communications included frequent contact, open, ongoing dialogue, and a mix of formal and informal venues. Also supporting good chemistry was reciprocity and consideration – keeping each other well informed, avoiding surprises, and assuming good intent. Communications should be purposeful and while the relationship might be close, it should not become a personal friendship. Chairs and CEOs alike felt their own good communications should intentionally facilitate good communications among and between the board and management, creating an environment conducive to sharing, learning, and confidence. Finally, good chemistry included Individual qualities such as competence, authenticity, being willing to learn and listen, and, most frequently mentioned, not a lot of ego (continue reading… )



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