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That’s why CEO candidates must have a better “board EQ.”

Research on the dynamics of CEO-board interaction has always been interesting. I recall one major scientific study that discovered that the structure of the board lasted for decades. Once strengthened or weakened, the board will remain that way for years to come. Further research is needed to clarify the factors behind this phenomenon.

One of the interesting discoveries is that, despite the structure of persistence, there are factors that drive change in line with the theoretical model of governance dynamics.

A strong or successful CEO can gain the power to drive more value in a company than any other company, in which case the independence of the board seems to be low. Board incentives or oversight are weakened when a company’s performance is improving, especially when the CEO within the company has been in office for a long time.

Board independence is high when the CEO’s turnover rate is high, or when there is uncertainty in the CEO’s capabilities, as is often the case around the world these days.

Regulators have severely restricted the dual role of CEO and chairman of the board, but India is resisting this move with government support. Studies have actually shown that board independence is significantly reduced when there is a dual role.

The terms “emotional intelligence” and “corporate meeting room” are not usually used together. Apart from the traditional hugs and nose rubs that were common before the pandemic, would you like to convene a group of hard-charged Type A personalities and visualize the chairman of the board suggesting a large group of hugs?

Successful CEOs have shown a better “Board EQ / EI” and are more likely to chair the board with much higher wages during their tenure. Even temporary performance degradation, such as in the current pandemic year, is less likely to be replaced.

Emotional intelligence (EI) is an important aspect of board effectiveness, and a chairman who puts EI at the top of the table fosters strong governance productivity. What is the secret of an emotionally wise board leader?

Daniel Goleman is recognized as a leader in EI, but it was Michelle Beldock who proposed this first method in 1964. EI is the ability to discriminate and manage one’s emotions from those of others. This includes three sub-skills. Ability to use emotions to apply to tasks such as thinking and problem solving. The ability to manage emotions, including adjusting one’s emotions and managing the emotions of others. According to EQ proponents, this is an important factor in separating wheat from rice husks. Of the many skills tested in the workplace, EI was the strongest predictor of performance. 90% of top performers have a high EI, while only 20% of bottom performers have a high EI.

Recently, a retail CEO who had been hanging boots after working for a long time asked for our advice on a successor plan there. His choice was the current CFO, who had been with them for several years and made a difference in the organization. However, he seems uneasy about working on the board, and several directors have pointed out this, he says. Is there a way to improve the EI issue on the board and take the position of CEO?

In our opinion, if the CFO builds a team that seems to work well with him, his emotional intelligence is less of an issue than his ability to align with the board. This is not uncommon. Dealing with the board of new or inexperienced CEOs has very complex dynamics. If the board is made up of retail and sales leaders, strong financial quants speak different languages ​​and can lead to higher EQ. According to the survey, 89% of C Suite executives believe that they are familiar with the “left brain” and are strong in balance sheet and number orientation. The overall board “EQ” can lean towards selling and instinctive types of the right brain.

In such cases, the current CEO will need to add emotional intelligence tutoring to his successor. Start by discussing mutual discomfort with the CFO openly and seek his views on the issue. He is also likely to feel this and has enough career to understand that he needs to stretch outside his comfort zone. Investigate if he finds it difficult to communicate with the board and if some members appear to be harder to read than others.

Board members often have little contact with C Suite executives except for board presentations. We will arrange informal briefings and discussions one-on-one, including the CFO for social events with the board, such as a dinner before the board. But board and committee meetings are also important. The CFO or internal CEO candidate should participate as much as possible in order to learn the interests, styles, and hot buttons of individual directors. Ask him to share his assessment of these and compare it to the current CEO’s understanding.

He also advised the CEO that if the chair of the audit committee works well with the CFO, he is the choice of successor, but may help build relationships with the board. .. The chair of the audit committee is also likely to focus on numbers and can be an effective relationship mentor for the CFO.

To conclude this, present more CFOs to the board and committees to exercise EQ strength and measure communication progress. Encourage him to share his insights and opinions, as well as the discussion of numbers. This is the skill required by the CEO of the work. Seek feedback from the board about his approach. His “performance” from them should show steady improvement, both for ease of communication and empathy, and for both the value and completeness of the information.

Ralph is a global board advisor, coach and publisher. Dr. M Muneer is a co-founder of the non-profit Medici Institute and a stakeholder in Rezonent Corp.



https://gulfbusiness.com/heres-why-a-ceo-candidate-must-have-better-board-emotional-intelligence/ That’s why CEO candidates must have a better “board EQ.”

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