We are doing our first-ever CEO performance review. How should we go about this?

Q: I think we should have CEO performance review, and my board does too, but we haven’t done one yet. What should we do and what should I expect?

-First-time CEO

Dear CEO,

I understand that you are finding your way through and figuring things out as you go. But you should make this a priority. Work with the board to create a review process. I believe this should be a 360 review, so you will get input from the board as well as your direct reports. You learn a lot more if you ask everybody.

At the same time, I also think you should implement a board review so you can monitor how the board is doing. (For more on this see my advice about how to change board members, which includes how to set up a board review process.)

In public companies, reviews of the CEO and the board are routinely done. Various processes are used. For example, some companies hire someone from the outside to interview board members and the CEO and this external team runs the review process. Some boards do it on their own. Either is fine; the important thing is that the process is done fairly and completely. In all scenarios, the CEO is a very important part of the process, and the board has a chance to opine once they receive the information.

The review process should not be a “one and done” event. One of the best practices is setting board and CEO objectives at the beginning of the year and monitoring them quarterly. The board’s lead independent director can help compile all the feedback and deliver the information.

While this type of process may sound intimidating, it can be very affirming. When done well and with care, this can be a positive experience. Even when a review surfaces something that’s a surprise, it’s beneficial because it reveals something that someone is thinking about and now there’s an opportunity to try to change it.

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