Exploring best practices for a first-time

CEO building and effectively partnering

with a board of directors

Kieran Moynihan
( kieran.moynihan@cit.ie )

Entrepreneur-in-residence,
Cork Institute of Technology

Genesis programme
23rd November, 2010
Used effectively, a board of directors is
a critical asset to a first time CEO in
driving a successful company
Used in-effectively or built poorly, a
board of directors can vary from a huge
waste of time, money and focus to an
absolute nightmare for a first-time CEO
What should a first-time CEO look for in
an effective board ?
•  Strong chairman

•  Pragmatic balance of management,

shareholder and NED members

•  Small number of experienced NEDs

bringing industry & management expertise
 Critical role of chairman
•  A strong chairman
–  Sets the tone & formality of the board
–  Drives the effectiveness of the board
–  Balances effectively between management &
shareholders/investors
–  Resolves conflicts
–  Puts the arm around and kicks the CEO s ass
as needed in private !
 Composition of the board

•  Once investors come on board, there is a

natural tendency by CEOs to want to pack
the board with supporters !
•  In addition to the fact that most VCs will
insist on a balanced board,
–  smaller boards are generally more effective
–  usually CEO and CFO ( or other key CxO )
sufficient from management side
–  CEO needs to resist tendency for defensive
mindset
 Role of experienced non-execs
•  Strong effective boards benefit from a small number of
experienced non-execs who bring significant
•  Sector expertise
•  Management expertise

•  Chairmen also use non-execs to help provide a balanced

focus to strategy, key decisions and importantly conflicts
between management and shareholders

•  You need non-execs who are

–  strong
–  strategic
–  ask the tough questions
–  will roll up the sleeves in a crisis
–  Have a cool head in a crisis or conflict situation
 7 golden rules for a CEO in a board

Formal & well-organised

Absolute honesty, openness & transparency

Listen, listen and listen

Focus : 20% on positives, 80% on challenges & areas

where you need board’s help and creative suggestions

Inspire the board members to want to proactively help

Continually build confidence in you as CEO

Under-promise & over-deliver !!

•  Formal & well-organised
–  Comprehensive CEO and CFO report package
–  Detailed minutes, progress of actions
–  Regular scheduled board meetings
•  Demand very high attendance levels

•  Absolute honesty, openness &

transparency
–  There is no other way
–  Holding back and spinning difficult news
inevitably leads to trouble and getting replaced
–  If in doubt, ask the chairman for guidance
•  Listen, listen and listen !
–  You need to build your own understanding of
each board member s style, concerns …..
–  Board meetings are your opportunity to
maximise the collective wisdom of the board
–  You need to spot warning signs of concerns

•  Focus : 20% success, 80% challenges

–  You need to give board members the
opportunity to contribute by helping in the areas
you need most
–  They are well capable of understanding the
good news from the board pack !
•  Inspire the board members to want to proactively
help !
–  An inspired board member will be thinking about ways
to help you outside of the board meeting
–  This could make the difference on selecting a key
strategy, helping win a deal or deal with a crisis

•  Continually build confidence in you as CEO

•  Every board meeting represents an opportunity for
the board to recognise your growth and performance
as the CEO
•  With each passing board meeting, your maturity and
confidence growing builds their confidence
•  This will be critical to deal with the eventual storms
that come to every business
Under-promise and over-deliver !
 Value of boards in a crisis
•  Usually board members have been in similar
crises and have navigated out of them
•  Board helps put a structured discipline of
responding to a crisis
•  Built-up goodwill is returned to you by a
quality board in times of crisis