It’s not just the current balance sheet that matters to the future of a company. Management matters. And for a long time, boards haven’t considered that as much as they ought to do. But they are starting to do so, reports Eleanor Bloxham, CEO of The Value Alliance and Corporate Governance Alliance in Fortune magazine.
Bloxham expects boards in 2013 to be less afraid of the economy. “What scares them more is whether your CEO and managers really have what it takes to pull off growth or innovation strategies.” Therefore the best boards are inviting open dialogue with those up and down the chain of command. That's because they know the best way to figure out if a CEO is on track is to understand what employees think.
More boards are willing to address egregious CEO performance issues than in previous years and, more than ever before, directors are willing to speak out in favour of chair and CEO separation. Also CEO succession will be a 2013 priority for many boards. Then there is CEO compensation – finding the right way to dish out incentives remains a headache.
Just about every director is concerned with board succession. Who to hire occupies some attention, but a bigger deal is figuring out who should go. Having to ask someone to step down can be a source of deep pain for many directors. At under-performing companies, activists may heighten the urgency by suggesting alternative members to the board.
As an individual, one of the best things you can do for yourself if you are going to work for a company is to research the backgrounds of the top managers, suggests Bloxham. You should dig deeper in this field for trickle-down reasons, says Bloxham. She talks about trickle down influence, which your company's board has hopefully placed on your CEO's - and thus your managers' - list of priorities.