Get serious to make CEO evaluations work: the review process should be rigorous, objective, and fair, and the end result should be a stronger relationship between the CEO and the board.
Publication:
Directors & Boards
Publication Date: 22-MAR-04 |
Format: Online - approximately 1872 words
Delivery: Immediate Online Access |
|
Full Article Title: Get serious to make CEO evaluations work: the review process should be rigorous, objective, and fair, and the end result should be a stronger relationship between the CEO and the board.(SPENCER STUART GOVERNANCE LETTER) |
|
|
Article Excerpt
AS THE NEED to avoid even a hint of boardroom impropriety grows, it is not surprising that boards increasingly are concerned about not only regularly assessing the performance of the CEO, but also utilizing a process that demonstrates the board's independence. Today, there is a growing expectation that CEO evaluations, like board evaluations, should be done using a more formalized approach.
CEO evaluations must be handled carefully and with regard for the changing governance environment and the sensitivity of the board's relationship with the CEO.
We have worked with a number of boards that have initiated a CEO evaluation process and have seen firsthand what works and what the potential pitfalls are. To help your board improve its CEO evaluation process, we have outlined the benefits of conducting evaluations. We also discuss how to best engage the CEO in the process and, most important, how to structure the evaluation to produce the most effective outcome for the CEO, the board, and the entire company.
[ILLUSTRATION OMITTED]
Benefits of the process
By implementing a thorough CEO evaluation process, the board can achieve numerous objectives, such as:
* Engaging the board in a discussion of the CEO's goals and objectives.
* Enhancing dialogue and candor between the CEO and the board.
* Providing meaningful performance feedback to the CEO.
* Reinforcing a positive "tone at the top."
* Providing important information to the board's compensation committee.
* Executing a key fiduciary responsibility on behalf of shareholders.
* Setting an example of accountability and dialogue for the entire management team.
The goal of a CEO evaluation process should be to enhance the relationship between the CEO and the board, in addition to...
|
|
More articles from Directors & Boards
Avoiding personal liability as a director.(SPECIAL REPORT 2004), March 22, 2004
Looking for additional articles?
Search our database of over 3 million articles.
Looking for more in-depth information on this industry?
Search our complete database of Industry & Market reports by text, subject, publication
name or publication date.
About Goliath
Whether you're looking for sales prospects, competitive information, company
analysis or best practices in managing your organization,
Goliath can help you meet your business needs.
Our extensive business information databases empower business
professionals with both the breadth and depth of credible,
authoritative information they need to support their business
goals. Whether it be strategic planning, sales prospecting,
company research or defining management best practices -
Goliath is your leading source for accurate information.
|
|
