Canada: The Relationship Between Council And The Chief Executive Officer

Last Updated: September 27 2017
Article by James T. Casey QC

The Chief Executive Officer of a professional regulatory organization is the senior staff person responsible for the overall operations of the organization. Typically, the CEO will report to Council which is responsible for providing governance oversight and establishing the overall strategic direction of the organization. A Chair will be appointed or elected to lead Council. The CEO is Council's one employee and typically has a direct reporting relationship to the Chair and a general reporting relationship to all of Council.

This article shares my perspective on the relationship between the CEO and the Council of professional regulatory organizations. My perspective is based on 30 years of experience in representing professional regulatory organizations and seeing first-hand both strong relationships between Council and their CEO and relationships that have floundered. My perspective is also based on my personal experience in serving in senior volunteer roles on a significant number of different Boards of not-for-profit organizations including serving as Chair. In those roles I have benefited greatly from strong relationships with the CEOs who reported to our Boards. The comments in this article are focused on professional regulatory organizations, however, the challenges and strategies identified apply as well to many not-for-profit organizations.

My perspective on the relationship between Council and the CEO is two-fold. First, in my view, a strong relationship between Council and the CEO is crucial to maximizing organizational success. Second, the relationship between Council and the CEO is fraught with many inherent difficulties and challenges. Councils and CEOs need to both work hard to develop healthy and strong relationships that help to advance organizational goals.

I have recently been reflecting on these questions:

  • What contributes to a strong relationship between Council and the CEO?
  • What are some of the typical root causes when the relationship flounders?
  • What are some strategies Council and CEOs can adopt to address the inherent challenges in the relationship?

Recently Field Law's Professional Regulatory Group hosted a "Roundtable Discussion" on "The Relationship between Council and the CEO". I facilitated a panel discussion of experienced CEOs from the professional regulatory sector which yielded additional insights on how to develop effective relationships with Councils.

I have identified a number of challenges in the relationship between Council and the CEO and suggest some practical strategies that may of assistance in meeting those challenges:

  1. Lack of Governance Experience

In my experience, individuals elected to Council are typically outstanding members of the profession dedicated to protecting and promoting the public interest. However, many have no governance experience from serving on other not-for-profit Boards. Suddenly they are thrust into a new role providing governance oversight for a complex organization.

As a strategy to address this challenge professional regulatory organizations should provide an extensive orientation/on-boarding program for all new Council members to help them understand their role. In addition, intensive governance training should be provided to all Council members. There should be an explicit decision on the type of governance model to be utilized by the Council.

A common complaint of CEOs is that Councils want to "meddle" in operational matters. The risk of Councils becoming too operationally focused is reduced with appropriate governance training. In addition, a good practice is to have the Chair develop the Council meeting agenda with input not only from other Council members but also from the CEO. If the CEO has a concern that an Agenda topic is too operationally focused, then this issue can be discussed with the Chair and addressed in advance of the Council meeting.

  2. The Changing Composition of Council

This is one of the greatest challenges to long-term success in the relationship between Council and the CEO. The CEO may have a great relationship with a particular Chair and Council but the composition of Council frequently changes. As one CEO put it, "You may have a great relationship with your boss but next year the boss changes and the year after that and so on."

How can Council and CEOs address this reality? Self-governing organizations need to make smart choices about the length of term of Council members to ensure that there is a proper balance between continuity and Council renewal. Organizations should also carefully design a system of staggered terms so that only a set number of Council positions change each year. This helps ensure not only organizational continuity but also continuity in the relationship between Council and the CEO. As the composition of Council changes, the CEO needs to be alert that Council's priorities and preferred method of operating may also be changing.

3. The Relationship Between the Chair and the CEO

I consider the relationship between the Chair of the Council and the CEO to be the key governance relationship. If this relationship is not sufficiently strong, difficulties for the organization will soon follow. There are some traps for the CEO in this area. A CEO may fail to appreciate the political realities and challenges faced by the Chair and Council or may trivialize those challenges. A CEO may spend all their energies focusing on organizational issues, staff issues, and external stakeholders and neglect the relationship between the CEO and the Chair.

A strong relationship between the Chair and the CEO is a catalyst for maximizing organizational performance and is a fulfilling part of the volunteer experience for the Chair. So what can be done to help develop a strong relationship between the Chair and the CEO? At the outset a new Chair and the CEO should discuss how the two of them want the relationship to work. How will Council priorities be identified? How will Council Agendas be developed? The Chair and the CEO need to regularly meet outside of Council meetings. How often will they meet? What is the mechanism to provide feedback from Council and the Chair on the CEO's performance? The objective is to mutually commit to full and open communication and develop a strong mutual trust. The CEO should feel that they can use the Chair as a sounding-board on all important issues including issues that will eventually be taken to the Council table. The CEO should explicitly ask the Chair about their priorities during their term. What does the Chair want to be her legacy? The CEO should consider what role they can play in supporting those objectives. In some circumstances it may be appropriate for the Chair and the CEO to both attend external, high-level meetings. These types of interactions help build the sense that the Chair and CEO are working as a team.

4. Council Feels They Are a "Rubber Stamp"

The high-performing members of the profession who typically volunteer to serve on Councils of professional regulatory bodies are motivated by the same fundamental reason as all other types of volunteers. They are prepared to donate their time and energy because "they want to make a difference". Council members quickly become frustrated if they just listen to reports and are asked to "rubber stamp" decisions that have already effectively been made. In these circumstances, trouble may be brewing due to the risk that the collective energy of Council members may become focused on non-productive issues.

Council needs to provide high-level strategic direction for the organization. Council should have developed a strategic plan for the organization and from the strategic plan the CEO and their staff should have developed an operational plan. Council should be providing regular oversight of the implementation of the strategic plan. If Council has governance training, has agreed upon a particular type of governance model and is in fact providing effective governance oversight, then Council members will feel that their work is important and "making a difference."

5. The Election of a "Political Reformer"

From time to time individuals seek election to Council on a "reform" platform. They believe that the organization and current Council are moving in the wrong direction and pledge that if elected they will be a disruptive force to straighten out Council and perhaps senior staff.

The election of "political reformers" is a reality of any democratic process. If properly channeled the energy of "political reformers" in promoting new ideas and in challenging the conventional wisdom can ultimately be positive for the organization. However, if the energy is not properly channeled then some of these individuals can become a disruptive force on Council. This reality represents a "trap" for CEOs. In these circumstances some CEOs take it upon themselves to try to "manage" the Council member who is not inclined to accept such management. The Council member is likely to view the CEO as overstepping the boundaries of their role. This can lead to outright conflict between the Council member and the CEO. So what can be done? It is the primary role of the Chair and not the CEO to manage the relationship between a Council member and the balance of Council. The Chair needs to ensure that Council is prepared to considered new ideas and potential new directions. The Chair needs to get the new member of Council "inside the tent", get him or her working on some projects and channel all that energy in a positive way for the organization. The CEO can play a supporting role in these initiatives but should not make the mistake or run the risk of accepting primary responsibility for the conduct of the Council member.

6. Lack of Information

A common source of dissatisfaction among Council members is that they do not think they get enough information or believe that they don't get the right kind of information. A few Council members may unjustifiably begin to think that the CEO is intentionally withholding information from them.

Providing Council with sufficient information and the particular type of information that advances their decision-making is always a balance. A CEO does not want to "drown" Council members in paper or electronic files. Nor will a CEO want to provide detailed information on operational issues for fear that Council will become operationally focused. On the other hand, Council needs to be well-informed and needs access to the type, quantity and quality of information that will enable them to fulfill their governance responsibilities.

A solution is to have the CEO check in with the Council on at least an annual basis about the information Council is being provided. The CEO should have a pre-meeting discussion with the Chair on the issue and then explicitly ask Council members:

  • Are you satisfied with the type of information you are being provided?
  • Are you satisfied with the format? Does the format enable you to review the information in an efficient manner?
  • Is there any other type of information that you want for your Council meetings and if so in what level of detail and format?

This type of open dialogue goes a long way towards addressing Council concerns about lack of information.

7. The "No Surprises" Rule

Council members hate to be "blind-sided" with bad news delivered by the CEO. Invariably they ask: "Why weren't we told about this earlier?" If serious problems are developing for the organization, it is important that the Chair and Council know sooner rather than later. Similarly, CEOs detest being advised late in the process about concerns by Council about the CEO. The CEOs want to be advised at the time a concern arises so that they can address the issue.

To address these concerns, there should be a mutual commitment to the "no surprises" role. If a serious problem for the organization is developing, then the CEO needs to advise the Chair and the two of them can jointly develop a plan for informing the Council. Conversely, the Chair needs to commit to the CEO that if there are serious concerns by the Council or by the Chair about the CEO's performance, then the Chair will advise the CEO at the earliest reasonable opportunity. "No surprises" should be the mutual commitment of Council and the CEO.

8. Weak Evaluation Processes for the CEO

A professional regulatory organization will often have relatively strong human resource practices for its employees, but in my experience may incongruously have weak evaluation processes for its CEO. The existence of a weak process naturally increases the risk of conflict between the CEO and Council. The risk is further exacerbated given the changing composition of Council since organizational objectives change and shift over time.

The appropriate committee of the Council should establish a strong evaluation process for the CEO and should obtain the input of the CEO on the process. The process could include:

  1. CEO objectives for the coming year are established with the objectives in writing and mutually agreed upon by the Council and the CEO. Ensuring that the objectives are mutually agreeable is critically important to ensure that Council and the CEO are "on the same page" with respect to the most important objectives. The objectives need to be "SMART": specific, measurable, attainable, realistic and timely.
     
  2. The Chair should provide informal feedback to the CEO on performance throughout the year.
     
  3. At the end of the year the CEO could provide the Chair with a self-assessment of progress in meeting the objectives. Such a self-assessment should be provided to Council.
     
  4. Council should hold an in-camera meeting without the CEO to assess how the CEO performed in relation to the agreed upon objectives.
     
  5. The Chair synthesizes the feedback and provides a formal performance appraisal to the CEO.

There are many variations on this process depending on the particular governance processes adopted by the organization. The key, however, is to ensure that there is a good discussion about the key objectives for the coming year and assessment against those objectives.

Conclusion

We all understand that organizational effectiveness is enhanced when a strong relationship exists between Council and the CEO and between the Chair and the CEO. However, the particular nature and structure of self-governing professional organizations creates special challenges to those relationships. Like all types of human relationships, Councils and CEOs need to work on the relationship, nurturing and strengthening the relationship as it evolves over time.

I hope this article has provided you with an opportunity for reflection on this important issue and has provided some useful tips in establishing a strong relationship between Council and the CEO.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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