The Managing Up Kit part 3 – are you on the board as well as being CEO?

It's not unusual for the CEO also to be a member of the board; that's where the title "managing director" came from. Being on the board, as well as being CEO, brings an added layer of complexity which is worth your while thinking, and talking, about.

The CEO "reports" to the board in a line management sense, and is certainly accountable to the board for the performance and success of the organisation. But there are no grades of directorship. Every director has the same duties, responsibilities and liabilities under the law – subject only to their obligation to employ their individual skills and expertise in a way that any similarly skilled person would reasonably do so as a director. In their capacity as director, the CEO is a brother or sister in liability with the rest of the board.

This dual nature of the CEO's role can cause some difficulty however, particularly for the CEO's participation in board meetings. I think the key to successfully managing the duality is to accept it as inevitable, and to be clear which hat you are wearing – CEO or director – at any given stage in the board meeting. In presenting reports to the board, or discussing the organisation's performance, you are unavoidably wearing the CEO hat, and should expect the board to ask searching questions or make incisive comments – in other words not treat you as one of them. When the board is making important decisions or approving significant transactions, you are entitled to put on your director hat, and exercise your rights as director on an equal footing with the rest of the board.

This is sometimes a hard thing for the board to recognise. It is an issue which is worth a specific discussion with at least the chair, to ensure that the rest of the board should expect there will be times when you will not be answering to them, but standing side by side with them.

In my experience this is not a card to be over-played, and tactically it is usually preferable to put on your director hat only when the context really requires it. This may be when you feel that the board may not be heading in the right direction, or when consensus is not appearing likely and a vote may be needed. The power of your director's hat is probably inversely proportional to the number of time you explicitly put it on.

One thing you should bear in mind about your position on the board is the information imbalance. As CEO you will be aware in great depth of the organisation's circumstances, performance and prospects. Non-executive directors touch the organisation much less frequently (see a previous post on "Managing the board") so be conscious when you do wear the director hat that you will have information the rest of the board does not, and act accordingly.