Two at the top

Peter Allanson looks at how chairs and chief executives can work together effectively

To some the letters TOTO bring to mind Dorothy Gale’s dog in the Wizard of Oz but to others it’s an acronym for the top of the office. This article refers specifically to the two characters absolutely at its pinnacle – the chair and chief executive.

This relationship is pivotal in defining how well an organisation runs and succeeds in its mission. Yet our experience suggests that insufficient time is devoted to building and maintaining it, not to mention dealing with the consequences of its breakdown or failure.

This relationship must be seen as both complementary and interdependent. There are clear differences in responsibility and accountability, while each needs the other to deliver their purpose and objectives.

Key role differences

• Chair:
  • Leads the board and ensures it functions effectively.
  • Oversees governance, strategy, and performance monitoring.
  • Represents the board externally and ensures accountability.
  • Facilitates board discussions and decision-making.
  • Ensures the board supports and challenges the CEO appropriately.
    
    
• Chief executive:
  • Leads the organisation operationally.
  • Implements strategy and manages day-to-day operations.
  • Builds and maintains organisational culture and values.
  • Is accountable to the board for operational performance and delivery.

In practical terms this means that the chair runs the board and the chief executive the organisation. A good chair facilitates from the wings leaving the centre stage to the chief executive to drive the organisation.

When the going gets tough the chair’s job is to provide air cover for the chief executive – unless that is not appropriate. Chairs offer advice in private as the chief executive’s critical friend. They must make sure that the board deals with the right issues, so its time has the appropriate balance between the need to discuss current issues and focusing on the future through strategy and leadership.

Missing from the list above is the question of who is the public face of the organisation. While it is difficult for a chair to avoid becoming involved in reputation management, who is the public face needs to be the subject of a conscious decision between the two – weighing up personalities, the type of organisation, relationships with stakeholders and capability should solve the problem. This is important, since public sector bodies can expect greater public scrutiny than their private sector counterparts, up to and including decisions being subject to judicial review, which brings with it closer media interest and scrutiny.

Building a strong relationship

Establishing a strong relationship may not happen automatically and being proactive about making it happen at the outset can make a huge difference.

The formal ingredients include effective on-boarding and induction involving both people. This should set out the expectations that each has of the other to build rapport. In practical terms this should include sharing organisational history, a discussion about the prevailing culture and developing an understanding of the governance frameworks in place, whether by choice or requirement. Both must be aligned on the organisation’s strategy – either the one they inherit or the one they are going to develop – and joint goal-setting and success measurement are central to this. Strategy, of course, includes mission, purpose and values.

The two should meet privately 1:1 at least monthly – perhaps more frequently in the early days and in times of crisis. The aim at the beginning is to build mutual trust and respect for one another, acknowledging differences of opinion, practice and authority – and having ways of resolving them when they arise. It is important that communication is two way, and the relationship assumes that support and constructive challenge between them is mutual while respecting roles and responsibilities.

Taken together the board in particular and the organisation as a whole should be confident in their combined leadership abilities.

Accepting help and support to build this vital relationship is a sign of strength. For example, GGi’s Two at the Top is a methodology that combines developmental coaching support and (if needed) mediation to help chairs and chief executives get to a place where they work as effectively as possible in the interests of their organisation. 

The approach emerged in response to clients who felt they wanted or needed a private facilitated space to work through what a successful relationship looks like, what is involved in role and contribution for themselves and others and/or to provide the right unified leadership for their organisation.

For some clients, this produces quick results and works well. Time together with a third-party peer makes all the difference. For others, it involves more time and commitment, focusing on managing through more serious or embedded differences of perspective, outlook and intent. The essential ingredient is that it is tailored to specific needs and the diagnostic phase is important. Of course, good outcomes require a genuine commitment to achieving a positive result, which may include compromise or change in behaviours/mindset.

The results are personalised and can be of lasting value beyond the immediate circumstances. It provides a chance for reflection, sometimes on personal work and career concerns for example.

Evaluating the health of the relationship

As with any management arrangement, keeping in touch regularly is essential to establish the no-surprises-at-appraisal principle that underpins trust and respect. Board and peer feedback through a formal or informal 180-degree process is helpful, and it can be a canny move to have the feedback interpreted and facilitated externally.

A key role for the chair is to create a board development programme targeted at both individual board members with specific needs and the whole board. This could include a session on relationships, including the one at the top, especially if the dynamics are not what colleagues are expecting!

Beyond internal feedback and reflection, boards are expected to undertake governance reviews every three to five years and these can uncover issues that bubble under the surface, thriving on being ignored.

And if it all goes wrong…

All relationships experience ups and downs but there can be signs that something more serious is afoot. Spotting these early and taking action can save time and angst. Things to look out for include:

• poor or infrequent communication
• disagreements spilling into board meetings
• lack of trust or mutual respect
• confusion over roles and responsibilities
• strategic misalignment or conflicting priorities
• staff or board members expressing concern.

So, acknowledging that there may be an issue early can prevent matters from escalating. At this point both parties should reflect separately and together on what is not working. Look at what is written down – what do your governance documents tell you about your rules of engagement? – check job descriptions, terms of reference, scheme of delegation and look at other models to see if they can be useful in resetting expectations.

The next stage would be to consider a neutral conversation facilitated either by another non-exec director or an external party. It is important that the conversation concentrates on shared goals and outcomes – values-based – and not personal grievances. Coaching and mediation may help. The aim should be to come up with a plan with milestones that you can monitor regularly.

This may not work, in which case succession planning and an orderly, professionally handled exit that leaves everybody’s dignity intact will be necessary. Personal and organisational integrity and reputation should be preserved as far as possible – a messy exit helps nobody.

The pessimistic – and/or the well organised – could have a conflict resolution plan up their sleeve for this eventuality. Following the methodology described it would look something like this:

Stage 1 – identifying the issues

• Identify nature of conflict
• Understand the context
• Assess the impact
• Engage affected stakeholders

Stage 2 – goals for resolution

• Rebuild trust and communication
• Clarify roles and responsibilities
• Restore governance practices
• Enhance stakeholder engagement

Stage 3 - actions

• Facilitated dialogue sessions
• Governance review
• External mediation support
• Workshops and development

Stage 4 – monitoring and evaluation

• Designated oversight role
  - A governance lead or board member provides oversight and tracks progress against goals and timelines.
• Regular stakeholder feedback
  - Collect feedback regularly from board members, staff, and stakeholders to assess communication and collaboration.
• Evaluation metrics
  - Use metrics like meeting attendance, decision-making efficiency, and stakeholder satisfaction to evaluate progress.
• Final review and learning
  - Conduct a final review to determine relationship repair and extract lessons for future governance challenges.

In conclusion

Being the chair or the chief executive is not easy in any organisation. But done well, these roles are among the most fulfilling of jobs. Being crystal clear about what the differences are and ensuring that responsibilities are then discharged with a clear separation of powers in mind will ensure that the organisation being led is well served.

Handing over an enterprise in a better state than when you arrived is a marvellous ambition and one that is rewarding to fulfil. Doing so with grace and resilience, together with the firmness of human touch, respect and understanding, are hallmarks of the finest chairs and chief executives.

Shakespeare and Wilde seem to offer a suitable summary:

“Nature hath framed strange bedfellows in her time.” (from The Merchant of Venice)

“Experience is the one thing you can’t get for nothing.”