Botched Executive Sessions Are Not Pretty

Don’t assume that your executive sessions will automatically be excellent.

 

by Dan Busby and John Pearson

 

The board speaks with one voice or not at all. [1]

John Carver

 

You may have attended one of these not-so-pretty executive sessions. Just before the board meeting concludes, ministry staff are asked to leave the boardroom. Then the board chats with the CEO, followed by the CEO leaving the room.

Next, board members discuss executive session-appropriate topics, such as the CEO’s performance and compensation. Occasionally—oops—sometimes they weigh in on topics that should have been discussed before the board went into executive session.

Finally, the board adjourns and everyone departs.

Except the CEO. He or she is left wondering, what was discussed in the executive session—and why did it take so long? The minutes are silent and record just one line: “The board met in executive session.”

So what could have been an enriching experience for both the board and the CEO becomes a misguided, amateurish spectacle—another botched boardroom debacle. All CEOs know they don’t always bring their A game to their work. The best CEOs are always open to coaching and improvement. And the best boards create a boardroom environment that leverages executive sessions for the good of the CEO and the ministry. In addition, they treat executives with thoughtful­ness and God-honoring grace.

Too many boards fail to follow a sound protocol when conducting executive sessions. The board is well intentioned, but they are oblivious to the fact that they are harming their relationship with the CEO.

Here are seven principles for conducting executive sessions of the board:

  • PRINCIPLE 1: An executive session without the CEO should never include issues that are of a non-sensitive nature. For example, a board discusses CEO performance and compensation in executive session and then veers into topics of a non-sensitive nature, such as changing the location of the next board meeting. The CEO should have been in the boardroom for the non-sensitive topics.

  • PRINCIPLE 2: A board should always meet in executive session in at least two situations: (1) when considering the CEO’s periodic review, and (2) when reviewing the CEO’s compensation. A review of the CEO may be performed by the board as a whole or by a board committee. After the review has been completed, the board chair or a board committee should discuss the results of the review with the CEO. However, if the entire board discusses the review with the CEO, voting and non-voting staff should be recused from the discussion.

The CEO’s compensation will always be reviewed in executive session. The CEO and voting and non-voting staff should not be in the boardroom when the CEO’s compensation is being discussed and approved.

  • PRINCIPLE 3: Board meetings should rarely be conducted unless the CEO is included in the meeting. If a CEO is not invited to a board meeting or a significant portion of a meeting, this almost always indicates the CEO’s tenure is in jeopardy. However, an executive session without the CEO is appropriate because the board should discern whether to retain the CEO and/or how to structure a transition for the CEO’s departure. Another instance when it is appropriate for the board to meet without the CEO is when the board is involved in a CEO succession planning process.

  • PRINCIPLE 4: The CEO should generally be present at the beginning of an executive session. This enables the CEO to gain a sense of the topics the board has in focus. Additionally, many questions that board members raise during an executive session can be answered only by the CEO.

  • PRINCIPLE 5: Following an executive session, the gist of the discussion should be communicated to the CEO in a constructive manner. The temptation is to be comprehensive in telling the CEO every point that came up. But boards should be sensitive about what they tell the CEO, particularly regarding executive performance.

The person presiding over the executive session plays an important role in subsequently delivering feedback to the CEO. The accuracy and honesty of this feedback are crucial. These are delicate matters. The wrong choice of words, the wrong tone, or lack of sensitivity can be very detrimental to the CEO’s relationship with the board.

Some boards’ policies may require two directors to meet with the CEO to share a summary of the executive session discussion. This practice allows the two directors to cross-check with each other regarding what nuances of the dialogue to convey. It also validates the overall feedback for the CEO.

Other boards invite the CEO to re-enter the boardroom while the entire board is still in session, and the board chair summarizes for the CEO the executive session discussion. This is often awkward since all eyes will be on the CEO, watching for even the slightest reaction, verbal or non-verbal.

Of course, numerous executive sessions are very positive in nature and the report will be an encouragement to the CEO.

  • PRINCIPLE 6: During the executive session, not every comment made by every board member will necessarily be appropriate or substantive. The person presiding at the executive session should ask for full board affirmation to the core value, “The board speaks with one voice, or not at all.”[2] If there is not majority agreement on an issue or topic, it should not be communicated to the CEO, and it should not be discussed by anyone outside of the boardroom.

  • PRINCIPLE 7: If feedback to the CEO is not provided right after the session, it should be conveyed within a day or two so that the discussion is fresh in the minds of board members sharing the report. Under no circumstances should comments or feedback be attributed to individual board members. Anonymity is of utmost importance.

Executive sessions are excellent only when appropriate topics are discussed and only when there is effective communication with the CEO before, during, and after each executive session. As experienced board members know, it’s far too easy to botch what should be a helpful lifelong learning experience for their CEO. Choose excellence!

At the heart of excellent executive sessions are fundamental Christ-centered values, the fruit of the Spirit: love, joy, peace, forbearance, kindness, goodness, faithfulness, gentleness, and self-control (Gal. 5:22-23).

 

BOARDROOM LESSON
_______________________________

Executive sessions can be extremely productive or very devastating.
One of the keys to an effective relationship between the CEO and the board
is for boards to strive for excellence when meeting in executive session
without the CEO. Pray for wisdom!
 

  Board Action Steps:

  1. Schedule: Establish a pattern for executive sessions. If your board meets monthly, perhaps quarterly executive sessions are appropriate. If the board meets quarterly or less often, perhaps an executive session at the close of each meeting is appropriate.

  2. Plan: Just as the board meeting needs an agenda, an executive session also needs an agenda.

  3. Debrief: After an executive session in which the CEO was excluded, the board chair and perhaps another board member should meet with the CEO in a timely manner to provide the CEO with an overview of the executive session.
     

 

Prayer

Lord, we especially need Your wisdom when we meet in executive sessions.
And we need the fruit of the Spirit to be active in our lives. Amen.

 

 

 

[1] John Carver and Miriam Mayhew Carver, Basic Principles of Policy Governance: Carver Guide 1 (San Francisco: Jossey-Bass, 1996), 2.

[2] Ibid.


This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.

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