Emerging C-suite perspectives that "The Bosses Are Back in Charge" may be more a projection of wishful thinking that a representation of actual leadership reality.
Indeed, the main thrust of a recent The Wall Street Journal article is that post-pandemic, "America's Bosses are starting to feel bossy again," and that this attitude is being reflected first and foremost in how CEOs are interacting with the workforce. According to the article, CEOs are leveraging employee concerns about job security in the context of rising layoffs, to apply more aggressive "return to work" policies and other rollbacks to pandemic-era workplace accommodations.
That may be true, and it's hard to blame CEOs for wanting to reclaim elements of their authority that were impacted by various pandemic-related realities. But the suggestion that, post-pandemic, CEOs are fully back in charge may be premature. For certain pandemic-era changes to their authority may be more lasting than they realize-especially as it relates to their dynamic with the board of directors.
Take for example the emphasis on returning to the office. Over the course of the pandemic, the suggestion that the board has a specific fiduciary oversight for workforce culture has become embedded in governance practice. Boards that were once totally deferential to the CEO on employee-related challenges are now much more attentive to the importance of workforce culture as a corporate asset. Regardless of the CEO's best intentions, boards can be expected to be more assertive than in the past on key topics such as return-to-work strategies, and reductions in force.
Another example can be found in the latest iteration of governance best practices from the National Association of Corporate Directors (NACD). Generally speaking, NACD's new guidelines speak to "the growing need for deep, proactive board engagement" in order to address the intensity and accelerating pace of change. According to NACD, this level of change is creating a "fundamentally different operating reality" than what executives and board members have previously experienced.
The new guidelines are a call to move beyond historical governance practices, to one in which boards are more agile and well informed. The guidelines speak to a board focused on more nuanced and difficult issues once thought solely as the province of the CEO, such as purpose, accountability, talent, culture and relationships-and long term corporate success. This a subtle but significant change.
Then there's the brand-new shift in Delaware corporate law, which makes clear that corporate officers (like the CEO) owe the same fiduciary duties as do board members, and have specific obligations to report horizontally and vertically on the existence of mission critical risks-a development with the potential to upset the management-board dynamic, at least in the near term.
And this reshaped leadership dynamic also arises in the context of the new, more aggressive corporate fraud enforcement policies of the Department of Justice. Should credible indications of internal wrongdoing arise, the company will be "under the gun" to make critical decisions about voluntarily reporting those concerns to the government. Those will be board-not CEO-level decisions, given their overarching significance.
The CEO is responsible for the day to day operation of the company. That's a concept that's never going to change. But how that responsibility is manifested has changed more than a little bit during the pandemic years. There's been a subtle but important shift in emphasis back to board engagement and focus. So while absolutely it makes sense for CEOs to reassert their authority as companies emerge from the pandemic, they should anticipate the need for an adjustment period in how they achieve this.
Because the shift in the board/management dynamic that's evolved over the last several years isn't going away soon. So while it may feel great to "be bossy" again, and as important as it may be to be "bossy" from a pure leadership perspective, it might feel even better to be "bossy" with the green light from the board.
Originally Published by Forbes
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