8 Ways for Boards to Get to Know Executive Leadership Talent

Board members all know that their number one responsibility is hiring, and if necessary, firing their CEO. Therefore it is imperative for directors to really get to know the company's internal leadership talent.

This is especially important since the great majority of companies promote their chief executives from within.  In S&P 500 companies, from 2017 through the first half of 2018, two-thirds of CEOs have been internal appointments. And this is down from 2016, when 88% of S&P 500 CEOs were promoted from within.

But it is actually quite a tricky challenge for board members to really get to know a company's executives. Of course, during formal CEO succession processes, boards can and should benefit from formal executive assessments to get an analytical and objective view of backgrounds, strengths, weaknesses, management style, and leadership potential.  However, in the critical months and years before the formal succession phase, when opinions are largely formed and internal candidates are ultimately selected for consideration, boards are often at a loss for how to get to know members of the senior management team beyond the superficial. Yes, directors see executives make formal presentations to the board and they may occasionally sit next to them at a board dinner when management is invited. 

In our work with boards, we've identified some creative and less structured ways for directors to get to know executives. Specifically, here are 8 ideas to consider:

1.   Assign each board member to serve as a mentor to a particular executive. Then have the director do periodic check-ins as well as quarterly or yearly dinners. When it comes time for the board’s annual talent review, s/he can comment knowledgeably about the executive.

2.   Invite board members to various operating reviews or town halls that key executives are leading in their normal operating roles.

3.   Here is a simple one.  Assign various executives to drive board members to board dinners (when the dinner is off site).  As any parent knows, there's nothing like a 15 minute drive to have real conversation and build relationships.

4.   Here is a fairly massive one. Assign the hosting and leadership of a board meeting to key executives. That is the preparation, the board director pre-meeting conversations, the actual execution of the meeting, and the post meeting follow-ups. This is particularly powerful as you get closer to CEO succession in that it forces the executive to take an enterprise-wide view of the company and gain experience and exposure leading strategic, operational, financial, and talent discussions with the board.

5.   Divide the board up into sub-groups and assign each group to be "responsible" for one of the company's business units or key functions. Through more in-depth business discussions and concentrated time with the relevant executive(s), this is sub-group can becomes much more knowledgeable about that part of the company and its leadership. Then when the board comes back together, each business and executive has the equivalent of a group of sponsors on the board.

6.   Have board members travel to the locations of executives on a rotating basis. One Fortune 100 company has a governance "war room" where they have a giant matrix on the wall with every board member on one axis and key executives on the other axis and cells indicating when and how they've interacted filled in.

7.   As part of the annual compensation process, the compensation committee can take the lead in conducting 360 interviews (even if only to assess the CEO’s performance) and in so doing interact directly with the company's next level of management.

8.   Select an annual class of top talent and divide them into three small groups (e.g., 8 to 10 executives) and assign them a project.  They should develop recommendations and also present them to the board. This provides up-and-comers insights into the workings of the board and gives the board visibility top talent. This also potentially adds in more creativity to problem solving and generates some solutions that the CEO’s leadership team might not have thought of.

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Please share other ideas for how boards can get to know the talent resident in the organization. This will be helpful both for boards in making the most informed choices and to executives seeking to maximize their chances to become CEO.