C (3:28)

Thanks Emma. It's really lovely to be here.

B (3:30)

Now, Anita, I know many leaders will be thinking, okay, but what exactly should I be seeking to understand from the board before I even begin as a CEO? Can you share some of your advice here?

C (3:42)

This is a great question, Emma, and it's certainly something that CEOs should be thinking about during the selection phase actually to really get to know the board and understand how the board ticks. This is firstly understanding the chair, the background of the chair, thinking about the composition of the board. Is it a mix of independent directors as well as investors? For instance, is the board comprise a group of industry experts or are there a broader set of directors? It's also really important for the CEO to be clear about the context of the company moving into the role. Is it a crisis scenario, is it a turnaround scenario? And indeed, what are the individual perspectives of each board member with respect to these topics? And then finally, relationships take time. It's important for CEOs to get to know each board member at a personal level. Putting in the time there will help them really understand the expectations of the board.

B (4:44)

There's so much in what you've said that resonates with what I'm hearing from CEOs, Anita, especially your point about context. And of course, boards come in such different shapes and sizes. Private equity boards are often quite small. They will have independents or maybe investors with deep industry experience. And so CEOs in my experience need to have an abundant amount of humility and resilience to be able to work effectively in that context. Publicly listed businesses have much larger boards and they have a whole range of different requirements in order to make sure the committees are properly chaired to to have the right diversity of thoughts and perspectives. And so with public company boards, because of the range of perspective, it's so important to understand one on one where people are coming from. Rusty, I'd now like to turn back to you beyond the fundamentals Anita just talked about. What can a new CEO tangibly do to clarify what the board truly expects from them. And how should the CEO share their own agenda too?

A (5:46)

What we recommend is of course going to meet with and talk with every board member. And when you're talking with them, ask them what are areas of concern for them. Ask them where they see the strengths of the company, where they see the opportunities of the company. They also need to talk to important stakeholders, employees, regulators, of course investors. And then within six months come back to the board and say, based on my listening, these are my priorities and confirm with the board with some clarity what those priorities are. No more than three to five. The list will be much longer, of course, but you can't do everything and prioritization is important. And then talk with the board about what you see as the key metrics, what's the dashboard you're going to create so that they can monitor progress and hold you accountable.

B (6:40)

That prioritisation piece is really crucial. And do you have any examples rusty of where a CEO has clarified what is important in a really effective way?

A (6:49)

So for a company where we recruited a new CEO from the outside, before the even the official transition date, she started working with her board, interviewing them to understanding what they believed were priorities. It's in a very tumultuous time for this sector, for this industry and she went on a listening tour with all their stakeholders and she right now is probably three months in with her new role and she is preparing for what will be her second board meeting of here's what I've heard and here are my priorities. And she's already started making decisions, so she hasn't held back. But she really went out of the gate very early, even before the official transition, of course, with the blessing of the outgoing CEO and the chair to listen and then test back themes and come up with a set of actionable priorities because the company, the organization, is in a tough spot right now.

B (7:49)

That's a prime example of what proactive engagement looks like in practice. Listening early, synthesizing themes and testing, thinking with the board. And what we also see as best practice is CEO transition coaching, which is a really bespoke 12 to 18 month programme. And what I particularly like about this is the 360 feedback element. So when we do this with new CEOs at the six week to three month mark and then again at the nine month mark, we'll take references from the board members, from the chair, but also from direct reports and even exco minus one to really allow the CEO to understand how they're impacting, how their messages are landing and get that live feedback in place. And of course with listed businesses, what's great is that in terms of the more formal set piece market updates, the brokers will also gather feedback from shareholders and that can also be super helpful. So, back to you, Anita. I'd like to talk a little now about how you can effectively communicate with your board as a new CEO. What does good actually look like, in your opinion?

C (8:54)

When I think about this, I'd kind of break it down into three parts. Firstly, it's all about the frequency of conversation and this is both formal and informal catch ups with the board. Secondly, it's about transparency. This is about sharing with the board the good news and the not so good news. And the third aspect here is really about being open to the different views and perspectives of the board. It's really appreciating the power of the manyness of the board and leveraging that to create organisational impact.

B (9:32)

Anita, I think that's a really nice way of simplifying it for our listeners. And in my work I often see CEOs underestimate the second one, transparency. No matter the ownership structure, transparency is key, but so is being transparent in a really sophisticated way and making the right judgment about the level of detail that is required and the appropriate type of messaging that the board needs to receive to know everything that's going on, but not get bogged down in too much space. Specifics. We'd now like to welcome back our third guest into the lounge, Ty Wiggins, Leadership Advisor in Russell Reynolds Associates New York office. Many of you will of course be familiar with Ty. He's a regular guest on Leadership Lounge and as the author of a book on how new CEOs can get off to a strong start, he clearly has a lot of really valuable insights on today's topic. So, Ty, welcome back to the Leadership Lounge.

D (10:25)

Thanks for having me. It's great to be here again, Emma.

B (10:27)

Ty, we know that many CEOs struggle with deciding how transparent they need to be with their board. That point I was just making. Could you talk us through some examples from your book about how some CEOs have navigated this?

D (10:40)

I remember interviewing PepsiCo CEO Ramon LaGuarda for my book the New CEO, and he talked at length about how he wanted to change some key things and he knew he needed the board's support. So what he did, he tried to establish a level of trust with them. He did that by not just telling them the positives, he was also open about the vulnerabilities and gave them the Full picture. You ultimately want their perspective on key matters, and for that they need to have the unvarnished truth. It enhances their ability to be a strategic asset for you. And when you do share issues with the board, always present a plan or a clear path forward.

B (11:16)

Ty, your point on candour is so important, but it can be so hard knowing what to share and when. And of course, in public companies, for example, they might meet monthly, in the us, they might meet quarterly. And so taking your board on a journey, picking up where you left off, and making that narrative really clear is even more important. And of course, when you do surface an issue, pairing it with your plan builds a huge amount of confidence and is so important. I'd like to move now to speak about conflict. Even in a strong CEO board relationship, there will inevitably be moments of tension or misalignment. In fact, in our research, 63% of new CEOs told us they had experienced a significant conflict with their respective boards in their first 12 months. Gosh, that really is quite a high number and challenging for new CEOs to work through that. So, Ty, clearly the relationship isn't always plain sailing. What do you often see as the main source of tension for new CEOs and their boards?

D (12:18)

The main conflict that we found in that research was around strategy. And this is where the board and the CEO are not aligned in their role in the strategy setting. So from our perspective, the best practice is that the CEO sets the strategy and the board approves it. Now, where it's opposite or the board gets into design and setting, that's where we saw the conflict. And if I think about a recent example, a CEO stepped into a role that had been vacant for a little while, and so the chair had been playing the role of executive chair, interim CEO. So one of the things that we knew we needed to do very early was to reset the alignment and expectations around strategy setting. The chair had done a great job, but was very comfortable in that role. So in order to establish the new CEO's right to lead, we raised it as a matter with the chair and the independent director to really understand that the strategy would now be set by the incoming CEO and not by the chair.

B (13:18)

That's such a difficult situation to find yourself in, Ty. And these transitions are always hard, but probably none more so than when your predecessor is back on the board and is judging everything, really having their own homework, marked by their successor. And ultimately, as a new CEO, you have been given a mandate to lead and drive change. And so all board directors Leaning into making that dynamic work becomes even more important. Important. Rusty, we'd like to turn back to you now. I'd love your perspective on how CEOs can manage disagreements constructively and without damaging that trust. That's been carefully built up.

A (13:56)

Several things come to mind. First is to have of course a dialogue and seek to understand why. What is motivating the disagreement? Is it a misunderstanding of facts? Is it a misunderstanding of priorities? So really try to ask the second and third order questions with the board members with whom you as CEO is not aligned. Sometimes it is just priorities and where people are focused. I actually currently dealing with a situation now where a CEO has a very specific point of view on where the board should evolve in terms of the board composition, given the strategy of the company and the skills that are needed and the speed and pace. And the nominating committee chair has a very different agenda, not necessarily in terms of skills, but in terms of speed and pace. And it has caused quite a lot of tension between the two. And what has happened is they've had to have private conversations and then conversations with the Namco to realign. And what they did that was productive, they each stated their perspective and the committee and ultimately the board came together on a timeline much more in line with the CEOs. But there was honest discussion and a constructive dialogue to make that happen.

B (15:16)

It's amazing how often it does come down to communication, Rusty, and being really specific about why conflict has arisen in order to dissolve it. Of course it's not easy, but it's the first step in getting realigned. And there's a lot at stake here, isn't there? Because how a CEO handles the first moment of tension can really set the stage for the long term relationship in my experience. What I found is that if the chair and CEO have a really close relationship, that can be hugely beneficial. Because actually if the CEO needs to push through an agenda that maybe is a bit brave, courageous risk taking a chair can carry the non executives with them by really leading that board effectively. So the chair CEO relationship is particularly critical in my experience. And Ty, I'd like to turn back to you now. We've spoken about how you can get off to a great start with your board board. But how can you best evolve this relationship over time?

D (16:10)

Well, like all relationships and all partnerships, the CEO board relationship should evolve as the business context shifts and develops. So periodic check ins are critical. One piece of advice I give to clients regularly at the end of their first 12 months is to re contract or reset with the board over those 12 months, expectations and communications can vary and you can get a slight misalignment in where the board thinks you've landed and where you've actually landed. So it's important to recontract and to explain to them, or remind them rather, where you spent your effort, your time, your resources, what you focused on, what you've achieved. And this sets you up for success as you move into the second year and you're again asking for their support to make the changes that you need to make to make the organisations successful.

B (17:01)

I completely agree, Ty, but I think it can be quite difficult to implement practically so much changes in that first year that recontracting is critical. And unless you pause to realign, small gaps can widen into misunderstandings. Anita, how do you see the relationship evolve over time?

C (17:19)

Oh, my goodness, Emma, does it change over time? It's so fascinating to see the relationship, particularly between the CEO and the chair change, where in the early days, the chair's role is often skewed to being the sponsor and the guiding force for the CEO. And as the CEO's leadership moves into the middle and the latter phases, the deeper partnership evolves and of course, the nature of the relationship with the board as a whole changes by virtue of board renewal, strategy, evolution, transformation and indeed the crises that can hit any board and CEO over the course of time.

B (17:58)

Absolutely. And the shift has to be deliberate. And as in so many cases, crisis can be a real accelerant. It can be really bonding for all of the board members, or indeed really revealing about maybe some that are underperformers, that aren't contributing adequately. And in those moments, the CEO chair relationship either compresses into absolute trust or fractures. There's not really any middle ground. So we're almost at the end of our time together in the lounge. But before we go, I have a final question for each of you. What would you say is one of the most common mistakes that new CEOs will want to avoid when working with their board?

A (18:37)

Yeah, I'll give you two that they're closely aligned. One is they do not understand the priorities of the various directors on the board. And so because they don't have that understanding, they are not adequately aligning the board on the key priorities because they don't have a full picture. The second mistake that we see CEOs making with directors is that they don't adequately put together a timeline and metrics that all the board members understand. So what are the goals? How are we going to get there? What are the key points along the way.

C (19:14)

And you, Anita, don't try and manage the board. The board is there to be a sounding board to challenge you as a CEO to help you be a better CEO. No CEO is bigger than their board.

B (19:29)

And finally, the biggest mistake you see.

D (19:32)

CEOs make ty they avoid or neglect the board early on. There's a lot for them to do when they start and typically the noise coming up from the organization is far louder than down from the board. So some CEOs will miss the opportunity to engage them effectively and early. And the board is a big time commitment for CEOs which many don't realize going in. We found that new CEOs spend around 25% of their time in their first year on board or board related activities. So going in, many don't expect to lose a day and a half, essentially a week to the board. And so you need to allocate and plan for that time. But you need to remember that this time spent early brings enormous benefit for you and the board longer term.

B (20:20)

Thank you ty. And that 25% or a day and a half a week number, it's huge, isn't it? And it really talks to the importance of CEOs being able to surround themselves with top talent and delegate really effectively. I wonder how many of our CEO listeners would confess to making one of these mistakes early in their tenure. We'd love for you to get in touch and share any experiences with us. Our time in the lounge today has come to an end. In 30 seconds, here's what we've learned. The CEO board relationship is fundamental, especially in the first year. Early intentional engagement builds trust, alignment and credibility that pay dividends over time. Productive relationships are built on clarity, clear priorities, metrics and expectations on both sides. Candle matters stronger CEOs share the full picture, good news and bad, while always pairing honesty with a clear path forward. And finally, the relationship must evolve. Periodic resets with the board, and especially with the Chair help ensure alignment as the business context, strategy and leadership demands change. If you have any topics or burning questions you'd like us to cover in future episodes of Leadership Lounge, please get in touch. Email your questions to redefinersusslernolds.com until next time. Goodbye.