Have you ever had a boss who was just a toxic SOB? We all have. One of my favorites was a guy who fired on the spot a low-level clerk who accidentally used, then took a pencil on the guy's desk. Just a regular yellow #2 lead pencil.
Then there was the bond broker who made his secretary go down to the garage and spray Raid in his Porche to kill the ants.
What's the worst boss you've ever observed?
One of the benefits of conducting a comprehensive CEO evaluation—a CEO-360 it’s often called—is that it creates a totally candid dialog between the reviewers and the CEO. For technology companies competing in rapidly changing industries this pure communication without the time-wasting caveats and disclaimers is essential.
The first step in making the CEO-360 a success is to empower the board with complete authority over its design, conduct, conclusions and resulting actions. All involved must be committed to the process and be willing to allow the thing to go wherever it will. This takes a very secure CEO to submit to such an evaluation. Usually, the board appoints one of its committees to conduct the project—sometimes it’s the Governance/Nominating committee or the Compensation Committee. Sometimes the committee charged with this responsibility engages an independent consultant to actually do the work and advise them.
Next, agree on the evaluation instrument. The most effective ones I’ve worked with are in the form of a survey that highlights particular traits of the CEO that the company needs in order to achieve its goals. There are a number of good ones available from experienced consulting firms. Having one instrument used by all evaluators is important to maintain consistency of results. Another of the companies I’m a director of—Primal Solutions—decided to create their own evaluation instrument. Their survey instrument targeted the CEO’s performance as company leader, as a manager, as leader of the executive team, future activities needed to improve their CEO’s performance and any things of particular interest or concern to individual evaluators.
The next step is to select those who will evaluate the CEO. True 360 degree surveys include not only the full board, but the CEO’s direct reports, the company’s outside legal counsel, the independent accountants and often at least one member of the advisory board if one exists. We want everyone involved who has extensive and continuous interaction with the CEO. Create an environment that encourages frank and honest feedback and retaliation in any way is not possible.
Once all have completed the evaluation, analyze the results and arrive at a consensus for each question. The board usually discusses the results in executive session (without the CEO present). Then a single representative of the board discusses the results with the CEO. This is often the lead director or the non-employee board chair. If the environment truly encouraged honest communication, then the results of this discussion should be a plan to correct any deficiencies in the CEO’s performance over the next evaluation period.
When done correctly, a spin-off benefit is to create trust and directness between CEO, the board and the executive team. All who participated should feel their voices were not only heard, but were truly listened to and their concerns were acted on.
Writers Resource Group