Friday, January 25, 2013

Hallway Executive Sessions

This week my wife and I were talking about “Executive Sessions” at board meetings. Clients often ask, “Should we have an executive session (without the CEO in the room) at every board meeting, or only as needed?”

My standard answer: include time for an executive session in every board meeting. 

But—and this is critical—always, always, always invite the CEO back into the room for a verbal summary of the executive session discussion. Then allow time for the CEO to comment or correct inaccurate assumptions or facts that might have been presented unknowingly. This works if you’ve built a grace-based culture. (Not all executive sessions, of course, focus on what needs to be fixed. They can also be used to affirm a CEO’s leadership.)

All of us have stories of dysfunctional boards that have used executive sessions inappropriately (whining, complaining, venting—with rare truth-telling back to the CEO when all boards members are present). So some CEOs—still stinging from previous board experiences—have successfully vetoed the idea of regular executive sessions. Bad idea.

“CEOs need to recognize,” Joanne said in our discussion, “that there will always be executive sessions whether the CEO wants them or not:
   • formal sessions per the agenda,
   • and informal sessions in the hallway.”

I thought her insight was brilliant (and I even told her that!).  Unhealthy boards sometimes stuff conflict and uncomfortable conversations way, way down during board meetings. It’s the proverbial elephant in the room—and no one’s talking.  Until…the coffee break or adjournment…and then everyone talks plenty in the hallway.

Wise CEOs and board chairs create a healthy forum for honest and open communication between the CEO and board members—in the meeting.

After an executive session, the board chair should invite the CEO back into the boardroom and then summarize the board’s discussion—with opportunity for other board members to add any missing color commentary that the chair may have skipped.  The chair might even repeat the classic line from Governance Guru John Carver, “The board speaks with one voice, or not at all.”  (Including not at all in the hallways!)

But note! The executive session—as a stand-alone tool—is inadequate. Effective boards must also conduct annual board self-assessments, annual CEO assessments, and hold the CEO accountable for three to five Annual S.M.A.R.T. Goals, among many other things. 

Governance is complex and is not for the faint at heart! This executive session stuff is hard. It’s risky. It’s not done well in many circles—but it’s at the very heart of what Christ-centered governance must be.  

QUESTION: What is your board’s policy and protocol for executive sessions?

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