Changing Board Expectations and the Future of the CEO

From changing consumer tastes and expectations to breakneck disruptions in technology, today’s dynamic business environment will require a chief executive who possesses a set of skills and experiences that are different from those that were needed in the past. To thrive in this environment, firms will need a corporate leader who understands the broader trends affecting the company’s industry, someone who can evaluate potential areas of risk and growth and is able to leverage that information to inform strategy. There is no one size-fits-all profile for such a CEO; but as boards develop recruitment and evaluations criteria, directors can consider the following attributes: 

HOW TO USE THIS TOOL: Directors can leverage this tool to develop and refine recruitment or evaluations criteria for their companies’ chief executives. 

Vision. The CEO has articulated a clear vision for the company that makes good business sense. This vision provides the foundation for building the business.

• Moves fast to act decisively on pressing priorities while maintaining progress on longer-term initiatives vital to sustainable success
• Has a strong understanding of new developments or substantive changes in our industry’s landscape
• Defines an enduring and well-articulated purpose, not only to serve as strategy, but also to provide a sense of “true north” for our company

Integrity & leadership. The CEO supports corporate culture by setting a guiding philosophy that is well understood, widely supported, consistently applied, and effectively implemented. He or she has developed an organization where productivity, morale, and teamwork are properly incentivized.

• Embeds a culture of innovation and low resistance to change into our organization
• Encourages feedback mechanisms that foster transparency at all levels of the organization
• Is receptive to subordinates sharing bad news or missteps, and insists that these are shared early
• Reliably shares information with the board about potential problem areas or strategic miscalculations

Strategic planning. The CEO leads the development of a long-term strategy and establishes objectives that meet the needs of shareholders, customers, employees, and all corporate stakeholders. He or she ensures consistent and timely progress toward strategic objectives

• Has a broad understanding of the corporation’s products, technologies, customers, and operations
• Effectively communicates the potential impact of broader environmental changes on our organization

Financial results and performance. The CEO establishes appropriate annual financial goals and long-term financial objectives, and reliably achieves these goals.

• Holds him or herself accountable to performance metrics and targets
• Ensures that adequate resources are in place to achieve short- and long-term goals

Succession planning. The CEO develops, attracts, retains, motivates, and supervises an effective top-management team capable of achieving objectives. The CEO provides for management succession.

• Draws strength from a truly diverse senior team, comprising talented individuals who each bring a unique line of sight to our company’s challenges
• Delegates authority, and is comfortable trusting others to get the job done
• Shows a willingness to step down when the time is right

Stakeholder relations. The CEO serves as chief spokesperson, communicating effectively with shareholders and all stakeholders.

• Is highly motivated and effectively motivates others to win buy-in and inspire action among employees at our organization
• Expertly engages others within and outside of the organization (e.g., employees, directors, customers, clients, investors, analysts, regulators, the media, etc.)

The information found herein was developed from the following resources: A Guide to Reading your CEO’s Leadership Style, Leading Transformation: Five Imperatives for CEOs, Report of the NACD Blue Ribbon Commission on Adaptive Governance, and Success at the Top: CEO Evaluation and Succession. Additionally, insights shared by NACD members over the course of interviews, conducted from September 2018 to January 2019, were utilized.