In the second instalment of the series of roundtable discussions from the AICD and BoardPro on not-for-profit (NFP) governance, experienced sector leaders discussed the importance of maintaining a balanced, transparent relationship between boards and CEOs.

    Kate Lidbetter GAICD, chair of Gondwana Choirs, and Steven Pearce GAICD, CEO of Surf Life Saving NSW, brought insights born from their experiences across multiple sectors to the discussion, alongside Brett Herkt, founder and CEO of BoardPro, and series host Phl Butler GAICD, the AICD’s NFP sector lead. The panel analysed the CEO-board relationship at all of its stages — from selecting a CEO to moving forward at the end of that CEO’s tenure. Throughout the conversation, the panel highlighted the significance of trust between board members and the CEO as core to strong governance.

    Such a trust can only begin in the hiring process. Pearce reflected on the process that Surf Life Saving NSW used to select him, noting that “in the NFP world… everything comes under high scrutiny”. To operate under such conditions, Surf Life Saving NSW turned to a blind recruitment process, wherein the selection panel only learned the identities of the applicants in the final stage of interviews, rooting the process in transparent and justifiable decisions that allowed the CEO and board to immediately feel confident in each other.

    The CEO-board relationship is distinct across every organisation and it’s vital to understand how that manifests itself in each case. The panel stressed that boards are not monoliths, comprising a multitude of people with different knowledge and priorities — and that for a CEO it can be very difficult to manage these differing world views. Butler noted that having a strong connection between chair and CEO can work to remediate this, although the panel agreed that the risk of alienating the rest of the board needs to be considered. Lidbetter said that managing this information imbalance in meetings held in camera requires similar consideration.

    Finally, all members of the panel noted that NFP executives are always in high demand and that talent management requires appropriate remuneration to keep strong CEOs, but also the knowledge to recognise when the best time for the CEO to exit arises.

    Watch the full episode here

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