Today’s corporate boards are under a lot of scrutiny. They must respond to activist shareholders, concerned employees, community members, and others in a hyper-sensitive political environment. They’re also tasked with ensuring diversity in their organizations, as well as their own ranks. Board leadership is more important — and urgent — than ever.
“There’s no doubt you want a lead director who can push back on the CEO,” said DuPont CEO Edward Breen, who is also the board leader at Comcast. But he also warned that “they better have a very open, honest, and collegial relationship with each other.”A new board leader is someone whom the chief executive will be working with on a regular basis, so it’s essential that the CEO be involved in identifying and interviewing candidates and vetting and picking the finalists.
Once the candidate and the CEO agree on their roles, the two lists should be discussed with the full board. Through our conversations with many board members, we’ve learned that this process is rarely followed — but many said they ought to embrace it next time around.
While every company has its own history and pay practices, the directors we interviewed advised against this, because it could create the appearance of a two-tiered board. Explained one Fortune 50 CEO: “If you’re going to be a lead director of a decent-sized public company, you’re not doing it for the money. So why create the optics that one director is more senior than others?”