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Good Leaders Need Safe Spaces

On CEO decision-making and loneliness at the top

  • July 2018

Notions of how the CEOs of major corporations work are ridden with clichés. One widespread view has them seated in stylish corner offices, directing the activities of countless highly motivated personal assistants and executive vice presidents, whose expertise they can call upon 24/7. Also at their beck and call are the members of the executive board, each with their own specific area of responsibility. One could be forgiven, then, for assuming that a good CEO is little more than an omnipotent puppeteer, pulling the strings to assign the right people to the right projects.

These are the CEOs of Hollywood screenplay writers. The real world could hardly be more different.

Key strategic decisions and appointments are best conducted behind closed doors, where frank discussions can take place in an atmosphere of trust. However, conventional power structures at large corporations rarely allow for such secure communication spaces.

Ideally, it should be a core job of any executive board to facilitate open dialogue. Reality, however, often paints a different picture. At a purely practical level, people simply don’t have time for regular meetings of this kind. And then there is the fact that open debate involves the latent risk of exposing oneself to attack. That, in turn, makes it harder for CEOs and board members to speak their mind or even to voice doubts.

Governance principles teach that this kind of dialogue, particularly where the CEO is concerned, is a matter for the board of directors. But as a CEO study published by Egon Zehnder reveals, only 38 per cent of chief executives turn to their chairpersons for frank feedback – a disturbingly low proportion. It is worth noting here, however, that providing constructive and forward-looking feedback for a CEO and putting oneself forward as a sparring partner is an art that not everyone can master.

To complicate matters, there is an inherent contradiction between the supervisory remit of the non-executive board and its chair on the one hand and any open and trusting debate with the CEO and executive board members on the other. This cannot be resolved unless a relationship of trust evolves between the chairperson and the CEO, based for example on long years of collaboration. In the German corporate landscape at least, this will likely be the exception, not the rule.

It comes as no surprise, then, to find that many CEOs have shaped their own spaces in which to reflect, reset their inner compass and seek outside guidance. The professional background of their go-to individuals is less important. What counts is their personality, inner autonomy, authenticity, in-depth understanding of the challenges facing the company in question, and intimate knowledge of the CEO as a person. If this leads to a peer-to-peer dialogue, then within the secure spaces they have constructed, CEOs can speak very openly about key strategic concerns or appointments. Critics may argue that such arrangements infringe the principles of good corporate governance, but this is not the case if CEOs and executive board members make certain that their advisors are contractually tied to the company and thus bound by strict non-disclosure agreements.

A conscious decision on the part of a CEO or executive board member to enter into dialogue with interlocutors that they trust is to be welcomed. This has nothing to do with improper cronyism: it’s worth asking how compatible our notion of governance still is with a world that is busily reinventing itself in many areas and where CEOs, too, need to be continually reflecting on their own behaviour. If they are going to succeed, they will need regular, honest feedback and critical sparring partners.

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