Q&A With Jon J. Masters
Building Productive Relationships Between CEOs and Their Boards

How can boards of directors and chief executives build better working relationships? In this post-Enron world, that is the $64,000 question. With everyone from the Securities and Exchange Commission to individual investors scrutinizing corporate behavior, businesses are under tremendous pressure to improve both board and executive performance.

Jon J. Masters, WJM Associates' corporate
governance practice leader, is both a corporate governance consultant and a senior management advisor. As a corporate lawyer with training in mediation and over 30 years of practice experience, he has counseled CEOs and directors in a variety of contexts and on a wide range of personal and organizational matters. A graduate of Princeton University and Harvard Law School, he is chairman of Masters Governance Consulting, LLC.

Why are so many CEO-board relationships so unproductive?
 

Masters: Many chief executive officers believe their directors lack the knowledge and expertise to be helpful and thus ignore them to the extent they can. A board that does not add value to a CEO is not likely to be a very effective overseer of management performance, because there is little incentive for the CEO to bring issues to the board or provide the board with more than the minimum required information

If CEOs and boards are to work well together, there must be something in it for both of them, and there can be. Given the complexities of businesses today, many CEOs can benefit from the counsel and support of a board that fully understands the company's business and has skills and experience that add value to its governance. Such a board, in turn, will function better because the CEO will be more likely to bring it issues before they become problems and thus enable the board to carry out its oversight more effectively.

What are some of the obstacles to improving the relationship?
 

Masters: Getting from here to there requires a focus not only on board structural issues, like directors' independence and the frequency and format of meetings and reports, but also on the "people" issues. Therein lies the rub. CEOs like to do things their own way without interference from the board, and the realities of the boardroom often make it difficult for directors to express their real concerns.

It is hard for a director to challenge the CEO, especially when the company appears to be doing well. Objectors are not seen as team players, and boards typically value collegiality over candor. Some issues are also so sensitive that no one wants to take the heat for raising them, such as the CEO who wants to stay forever and refuses to do succession planning.

How can you overcome these issues?
 

Masters: To help the CEO and the board develop a shared understanding of each party's desires and concerns, a skilled independent third party is often needed to create neutral ground. As a confidential adviser, this person would be able to interview each board member on a not-for-attribution basis to surface hidden concerns and help communicate them positively to all parties.

Bringing board members and CEO together, the adviser might then facilitate the development of an action plan to deal with key issues. Periodic review meetings would keep the process in motion as the company faces the usual changes and challenges of doing business. All of this requires sensitivity, commitment and time, but the resulting constructive atmosphere would increase the company's credibility and performance as well as its accountability.

For women as well as men, success as a line manager is often a prerequisite for advancement.

Running a profitable P&L is the red badge of courage in the corporate world. Until you've survived the battle of the marketplace, and made decisions in the midst of competitive crossfire, some would say you don't really belong in a position of leadership.

In most organizations men still hold the lion's share of line positions. This trend is slowly changing, to be sure. But according to Bill Morin and Janice Reals Ellig, co-authors of What Every Successful Woman Knows, women need to overcome their fear of failure in order to secure and succeed in positions of line management.

To a woman, the possibility of failing in a P&L job sounds like a career death knell. And given the obstacles women still face in the corporate world, can anyone say for certain that that's not the case?

Men, on the other hand, probably don't even consider the possibility of failure before they take on P&L responsibility. To them, it's just another step on the road to success. And if a man fails at a P&L job, he tends to regard the failure as something that just didn't work out, and hardly the end of his career.

By viewing line experience as just that -- a phase in their careers from which to learn as well as generate profits -- women can increase their chances for success.

To start gaining vital line experience, Morin and Ellig suggest women consider these five steps:

1. Focus on line responsibility. It's a question of mind-set: A way to think about yourself and your career in order to position yourself for seizing the right P&L opportunity. It may be necessary to relocate and take a salary cut. So what? If the opportunity is right, you will soon be able to have your pick of locations and your compensation will climb.

2. Get the skills and capabilities. When the opportunity presents itself, you're going to have to be prepared. Start now. Go back to school for a master's degree, take individual courses or attend workshops where you can augment your business knowledge. If it's a matter of personal style, consult with a business coach to strengthen your leadership and communications skills.

3. Broaden or create your opportunities. Keep your ear to the ground both inside and outside the corporation. Listen for deals you yourself can bring in and turn to your own advantage. If you're at a corporate function, use the social opportunity to introduce yourself to members of senior management; at charitable events, network to meet new people. You never know where your next career opportunity will come from.

4. Broadcast your availability and desire. You can't win by hiding in corporate closets. You've got to come out in the open to see and be seen. Get on your boss's calendar and let him or her know that you would like P&L responsibility -- as well as his or her support.

5. Think and act like a line manager. Stuck in a staff job? Manage it like a line job. In a line job? Act like a leader. Get your people to follow your lead, and soon your whole team will be partners in your ambition.

One more thing ... when you finally achieve your goal of running a P&L, remember the hard work it took and become a mentor to other women who share your ambitions.

Onboarding -- the practice of providing newly appointed executives with individual coaching for their first three to six months -- is becoming more widespread as businesses seek to gain yet another competitive edge.

The faster executives assimilate into new organizations, the faster they can contribute to the growth of their companies.

Few organizations have the perspective of bringing new people on board successfully. They are so focused on recruiting the right candidates that they overlook the benefits of providing new executives with early support or assistance. As a result, many executives fail in their first 12 to 18 months in a new job, and organizations have to begin the process of finding a successor all over again.

Onboard coaching makes supervisors think differently by getting them to articulate expectations. As a result, both supervisors and new subordinates are on the same page from day one, making for a more effective transition.

One strategy that has worked for WJM Associates and its clients is to help newly hired executives assess their priorities and secure "early wins."

In one case, WJM Associates helped a client recognize that it was more beneficial to bring in one or two major new accounts early on, rather than focus on inventory management problems right away. In another case, the firm pointed out that the CEO wanted a new executive to visit production facilities, rather than generate goodwill by giving industry speeches.

These may seem like relatively simple accomplishments, but they went a long way to helping the executives assimilate quickly and successfully into their new organizations.

Recently, I was asked to advise an executive in crisis.

In the six months since he had joined the company, the executive had lost eight of the 10 people reporting to him. Not only did the company have to incur financial costs to replace the departed managers, but an untold amount of "institutional knowledge" also vanished when they walked out the door.

When we conducted one-on-one interviews with the eight managers, each gave the same reason for leaving: they did not trust the new executive. In story after story, they recited instances when he distorted the truth, betrayed their confidences, and treated them with disrespect.

When we shared this aggregated feedback with the executive, he couldn't believe that's why his people left. Gradually, however, he came to accept the feedback as truth, and asked for our help. We worked with him to change his management style into one based upon trust, which involved his becoming more of a coach to his staff.

Another time, I was visiting a client when I overheard a manager and an employee discussing expectations that the subordinate was not able to meet. Without consoling or criticizing, the manager simply looked the person in the eyes and sincerely asked, "What can I do to help you?" Although the manager in no way relieved the employee of his responsibility to improve his performance, I could see relief and gratitude on his subordinate's face.

Managers who behave like coaches are far more effective than those who don't. Any coaching relationship -- whether it is boss-subordinate, parent-child or mentor-mentee -- is an ongoing process. It happens continuously, sometimes without the parties involved even knowing it.

Coaching is about building a trusting relationship by giving honest, helpful feedback. It's about creating a psychological and emotional environment where positive things can happen. It's about setting goals and helping people achieve them.

Not all coaches are managers, but all managers can -- and should be -- coaches.

Before executives can exceed expectations, they have to understand them. Unfortunately, bosses -- from boards of directors to division managers -- do not always make expectations clear. As a result, conflicts can occur and thwart organizational growth.

To help high-potential executives understand and surpass expectations, Montana Leadership Institute, a management-training organization founded by WJM Associates, will offer "Exceeding Expectations: Your Leader's and Your Own" June 1-7, 2003 at the Big EZ Conference Center in Bozeman, Montana.

This concentrated, five-day executive coaching experience will bring the supervisor, the work team and the individual participant closer to having a common understanding about how and where the individual should be concentrating his or her efforts. For more information or a brochure about this and other programs offered by Montana Leadership Institute, please contact Bill Morin at 212-972-7400 or Betsy Swartz, MLI director, toll-free at 866-586-9226.

This month WJM Associates welcomes two new members to its management team, Tim Morin and Bud Opfinger.

Tim is our first chief financial officer. He comes to WJM Associates from Prudential Securities' investment bank, where, as a vice president, he managed private and public equity offerings, as well as mergers and acquisition transactions, for midsize media and technology companies. Before that, he was associated with Merrill Lynch and two major New York advertising agencies. Tim received a BA degree in economics from Trinity College in Hartford, Conn., and an MBA degree in finance and accounting from New York University. He also studied at the London School of Economics.

Bud is a senior consultant who will help us develop new client relationships in New York City and Long Island. His experience includes positions in sales management with Manchester, Drake Beam Morin and Digital Equipment. Bud is a graduate of Fordham University and served in the United States Air Force as a lieutenant.

"The addition of Tim and Bud to our management team reflects the growth we are experiencing at a time when many other human resources firms are retrenching or even shutting their doors," says John P. Finnerty, WJM Associates president.