The CEO’s Question Conundrum (Board Members – Pay Attention!)

A CEO’s Question Conundrum is the conflict a leader has when dealing with inquiries that come from the board. The board is the CEO’s boss, and can ask for just about any CU related business, yet sometimes the board gets too far into the weeds with information requests. They go beyond agreed upon boundaries, they can be significant distractions, AND they take up valuable executive time. Does the CEO push back?

By Kevin Smith and Tim Harrington

Does the CEO pushback on board requests?

The board can ask the CEO anything, right?

Let’s avoid all technicalities and cutesiness for this one. (ex. Anyone can ask anyone anything … technically speaking.) Let’s jump right to: Should the CEO answer any and all questions posed by the board? The TEAM Resources answer: NO. (*Even though I want, with all my heart, to say “it depends.” K. Smith.)

This topic is posed to us regularly. Not from CEOs who are being dodgy, or hiding things, or as lies of omission. Generally speaking this comes to us from earnest and hardworking CEOs who have a tremendous amount on their plates. They are pressed for time. They come to us when their boards are overwhelming them with requests for information that is operational, in the weeds, and far from strategic.

At TEAM Resources, we teach “strategic governance” that creates written policy boundaries between the operational and the strategic, between the board’s role and the CEO’s. By and large CU boards are making an effort to move towards the strategic, but operational views of board service linger in the DNA of the credit union movement.

There are a couple of things at stake here to address:

1. A well-educated board is key to a board that can function at the strategic level. (That means asking a lot of questions to learn, does it not? Yes, ma’am it does.) But there should be a time and a place for the educational pieces. Taking the CEO’s valuable time to get to these can be a significant problem and a time drain.

• • This doesn’t necessarily just mean the CEO “delegates” the answering of board questions. That doesn’t necessarily solve the problem.
  • The board should have access to lots of data and information to be well-informed and to verify the information that the CEO provides. (Trust, but verify.)

2. This is a delicate balance as directors shouldn’t be stifled in their information feedback systems, so they fulfill their fiduciary duty and understand what’s happening and the levels of risk in the credit union.

Can and Should the CEO Push Back?

If the board is asking for too much of the wrong kind of information, should the CEO push back? We believe that they should. This is terrifying advice for many CEOs. After all, the board is the CEO’s boss and this could create negative tension. The CEO can push back in a calculated and thoughtful way by asking their own questions about the information at stake. What do they need? And why? What will they do with that information?

It’s our sincere hope that the CEO isn’t terrified to push back on this information. In fact, with the right kinds of preparations, good strategic governance conditions among the board members, and the right kinds of communication between the board and CEO, it isn’t “push back” per se, but healthy navigation of the governance tightrope.

How Does this Work?

The board and CEO create the right conditions for healthy strategic governance by talking about what it means to be operational or “in the weeds” and what it means to be at the strategy level. These are discussions that result in clear governance policy. The board must come to an agreement among itself to know what kinds of information they need in order to do strategic work. We recommend that the board chair be the one who passes along requests from directors, after they have agreed (and voted, if necessary) about what kinds requests they will make. We don’t believe that individual directors should make requests to the CEO or staff members. (This undermines the chain of command and staff members may view this as de facto policy making.)

Information Filters for the CEO

1. If the question is clearly strategic or aligns with the Key Strategic Drivers, easy: answer it.
2. If they ask for a report that is new, not typical, or clearly operational, that’s easy too: bounce it back to the board.
3. If they ask a question that is a clarification of something in the packet and it can easily be answered without research, the CEO may just want to answer it and be done with it.

However (#1), if the question seems purely operational, and NOT just a clarification of something in the packet, pass it back to the board. 

However (#2), if the question requires research or going back to another member of the management team, this requires some discernment. You may want to pass it back and ask if the entire board feels there’s value in getting this answer.

4. If the answer is easy, and not leading down the slippery slope to operational digging, it is probably worth answering. If it is leading down the slippery slope. Use it as a teaching/discussion tool at the board.

A value in the director asking questions before the board meeting (as long as they are appropriate questions) is that the CEO can resolve the issue ahead of time and it doesn’t take up meeting time. So, the CEO must have some clarity on when to respond and when to bounce it back. When the board and the CEO work together to set up a healthy governance environment, there is no CEO’s Question Conundrum. 

Let us know what you think. Leave a comment below. We’d love to hear from you.