How do I challenge a CEO in the right way? This is a much-asked question by board members, particularly newer non-executive directors.
The daunting reality is that critical decisions made by intelligent, responsible people with the best information and intentions are sometimes hopelessly flawed.
When it comes to corporate governance, it is vital that the board reviews and approves (or rejects) proposals put forward by the CEO and executive.
The most significant mistakes are often made by CEOs who are largely undisciplined by their executive team and their board of directors.
The board and its directors have an essential role to play in challenging and supporting proposals on future strategic direction.
When a board of directors does not pay enough attention to the CEO’s and the executive team’s ambitions, things can go wrong.
The board should act as a ‘critical friend’ to the CEO and senior management at all times, especially when critical strategic decisions are being made. Every area of discussion – including corporate strategy – should be challenged.