September 17, 2024
CEOs Beware: You Can’t Fix Governance
Running a company is difficult. Running one with a dysfunctional board of directors is impossible.
Consider these examples, all of which I heard about firsthand in meetings with CEOs:
- A company where directors throw things at one another during board meetings.
- Another where directors rejected the CEO's plan to run a disciplined business, saying to him, "Why choose between options when we could do all of them? Just start, and we will figure out funding later."
- A third company where the board has a decade-long history of poor decision making and undermining management.
If the board is deeply dysfunctional there’s nothing the CEO can do about it. The light bulb doesn’t want to change.
What does that mean for CEO candidates? Due diligence on the board of directors is critical. If there are signs of dysfunction, don't take the position. It’s that simple.
If you've already taken the job and find the board is making success impossible, it's time to leave. Staying would most certainly mean a demoralizing march toward failure and eventual dismissal.
I asked one of those CEOs what he learned from his experience. He said, "“What did I learn? I learned you can’t fix governance.”
