The relationship between the CEO and the board

At the recent MAT leaders event in the East Midlands we discussed one of the most important relationships in any organisation – that between the CEO and the organisation’s trustees / governing board. We were delighted to be joined by Vanni Treves, formerly Chair of organisations such as the National College for School Leadership, Channel 4 and Equitable Life. Vanni remains Chair of London Business School where he also lectures on corporate governance.

The group considered how every organisation has its own origins, priorities, personalities and challenges so adaptability is crucial. The CEO should understand what his/her board is there to do and wants to do and the ways in which it wants to do it, and then make it happen – all, of course, within the bounds of what is possible.

There are – in general terms – five major objectives of MAT boards:

  1. Set major priorities for the Trust – the Board should set time aside for strategy days so that it can work out what its priorities are. It is then the role of the CEO to deliver on these priorities.
  2. Hold the CEO and, through him/her, other leaders to account. It is for the board to make sure they are doing the job as well as the Board wishes them to do it and support them to get better if they are not doing the job as well as they should be. Vanni suggested that there are probably, at any one time, 20-25% of CEOs who are doing well and there are no concerns; 20-25% of CEOs who should be removed and replaced fairly swiftly; and 50-60% of CEOs who the Boards will be worrying about all the time because they need to get better at their role.
  3. Monitor and seek improvement of educational outcomes.
  4. Oversee the financial performance of the organisation and making sure its money is well spent
  5. Set up an effective committee structure – this will be up to the Board/MAT but will likely involve finance, legal, etc – if you have an effective committee structure this makes the role of the Board more straightforward as they can be confident that the individual committees are on top of the issues they are being tasked with overseeing

Vanni then described they key elements he feels must be got right in terms of the relationship between the CEO and the Trust Board:

  1. Demarcation lines between roles – especially between the Chair and the CEO. Vanni suggested that it would be impossible to determine this formally for all cases because all MATs will be different; so it will be up to the MAT to determine this
  2. Formal communication lines – in particular regarding Board papers. Vanni said these should be put together by the CEO, with a summary of the key contents of all the Board papers forming a document at the front. This should also highlight key issues of concern to the CEO, in a ‘what’s good’, ‘what’s bad’ and ‘what I’m working on’ format, so that this is clear to the Board. A lot of trouble should be taken with the composition of Board papers, so that the Chair and trustees can properly discharge their responsibilities, knowing they have the information they need in a clear format
  3. Informal communication lines – the CEO has the absolute right to talk to other Board members other than the Chair, BUT they should make it clear to the Chair that they are doing so
  4. Above all, no surprises – whilst good news can wait a bit longer, the moment things are going wrong, the CEO should be discussing these quickly with the Chair in the first instance and then the wider Board

Interestingly, Vanni also described a role that is present on a number of corporate Boards but is not a requirement for MAT Boards – that of the Senior Independent Director – whose role is to provide a sounding board for the Chair and to serve as an intermediary for the other directors where necessary. The Higgs review in 2003 described the role in the following terms: “The senior independent director should be available to shareholders, if they have reason for concern that contact through the normal channels of chairman or chief executive has failed to resolve.” The SID can also play a crucial role where relationships may become challenging between a Chair and CEO and a third party is need to facilitate progress. Colleagues were interested in the role of the SID in the corporate environment and felt it could be a helpful appointment for MAT Boards if it would be allowed.

Vanni also described what he felt were the main causes of trouble between the CEO and the Board:

  1. Surprises – again, there should be no surprises for the Board, they need to be confident they are receiving all the information they need in a timely way
  2. Disagreements on strategy – where the Board and the CEO don’t agree on the overall strategy for the organisation and therefore the Board doesn’t feel confident the CEO will deliver what they want
  3. Poor Board/Chairman/CEO chemistry – if these relationships are not sound, it will be obvious to other members of the Board and other staff so action will need to be taken by those concerned to resolve any issues. If they can’t be resolved then either the CEO or the Chair could be asked to leave, and Vanni suggested it would almost always be the CEO that stays, if they are strong, performing well and have the support of the wider Board.
  4. Poor performance; perceived weak leadership – again, the Board needs to be confident in the performance of their CEO and to support them to improve if required
  5. Insufficient appraisal and support – being a CEO is a lonely business and it is the job of the Board to help the CEO do as good a job as they can, through mentoring, regular appraisals, 360 degree review, SWOT analysis, etc, and that some form of appraisal should be done at least twice a year
  6. A weak Board – it is very demotivating for the CEO if Board members lack commitment, don’t attend meetings, haven’t read the papers and don’t collaborate

Vanni said he couldn’t emphasise enough the importance of taking the time to ensure MATs recruit the best Boards possible for their organisations.

I asked Vanni what advice he would have for CEOs who are struggling to recruit good quality Boards. He told me that a lot will depend on the leadership of the MAT, as it is their role to enthuse people to want to serve the MAT and therefore join the Board.

Vanni suggested that there is a real anomaly in the public sector around paying Board members – NHS Foundation Trusts are able to pay their Board members but at the moment this is not allowed in education. Vanni said that, in his view, paying trustees even a nominal amount created a strong ‘psychological nexus’ to do the job/role, and that this might help with the issue MATs are facing in particular in hiring the right people to serve on Trust Boards.

In July, Forum Education will be hosting a roundtable on recruiting and retaining high quality trustees to MATs. We believe that the success of the academy system fundamentally depends on ensuring the highest standards of governance in all academy trusts.

The outcome of this roundtable will be a thinkpiece paper which we will share with a number of key stakeholders, including the new government, the National Schools Commissioner and others. We also want the paper to provide an element of practical help and support for MATs across the country

We will be asking the following questions:

  • What would high quality training and development for MAT trustees look like? How should it be delivered to meet the emerging and evolving needs of trust boards?
  • What more can be done to incentivise people from a wide range of backgrounds – including those with significant professional experience – to become trustees? What more can MATs do and what can government do to help?
  • How can and should the system and government promote the role of multi-academy trusts and the difference that being a MAT trustee can make?

 The report will be published later this summer.

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