(1) CEO Centered.

The BoD holds the CEO responsible for the
decision and, more important, its results.

There the BoD accepts that the CEO
will/may use information, analyses,
recommendations, etc. from the CFO, any or
all of the C-suite, some analyst on the
staff of the CEO or CFO, anyone in the
organization, outside consultants, advice
of the BoD, etc. but still holds the CEO
responsible for the results of the
decision, no matter what advice he (she
here and below) got.

In this case, for the BoD having the CFO
and the rest of the C-suite sign off on
the decision in blood is irrelevant.

(2) CFO Centered.

The BoD assumes that the CEO hired the CFO
to be the source of expertise on
everything financial. The CEO is no more
supposed to question the judgment of the
CFO than he would that of, say, a board
certified heart surgeon. Or, the CFO is a
professional with the expertise and
professional responsibility to make sound
decisions.

In this case, the BoD will look to the
CFO. If the CFO signed his recommendation
on the decision and the CEO accepted it
and did at least a good job with the
implementation and execution of the CFO’s
recommendation, then the BoD would hold
the CEO blameless.

If the CFO’s recommendations often don’t
work, then the BoD might expect the CEO to
get a new CFO.

(3) C-Suite Consensus Centered.

The BoD accepts that no one person can bat
1000 on such decisions, that business
experience, judgment, intuition, acumen,
etc. can be important, and wants the CEO
to have made good use of at least the
C-suite and maybe more and achieved a
consensus.

Then the BoD wants to see the decision
signed by all the more qualified persons
who were part of the consensus.

At least for the first poor decision, the
BoD will hold the CEO responsible not so
much for the actual results of the
decision but for the decision making
process and, as usual, the
implementation, execution of the decision.

So, of (1)-(3), what is the real story;
according to the BoD norms, which of
(1)-(3) will the BoD want and accept?

Or, maybe, the real norms are vague and
the real situation is simpler: If the
results are poor, then everyone on the BoD
gets a free pass; the CEO will be in the
center on the gallows; and there will be
plenty of room on the gallows for any and
all others in the company who were
significantly involved.

Then, should the CEO try to involve
members of the BoD in formulating the
decision? I’m guessing no:

Why? Suppose a member of the BoD gives a
recommendation. If the CEO takes the
recommendation and the results are good,
then the BoD member can take a lot of the
credit. If the results are bad, then the
CEO gets all the blame. If the CEO does
not take the recommendation, then that is
a strike against the CEO no matter what
the results. So, for the CEO to ask a
member of the BoD is for the CEO a
lose-lose-lose situation.

Or from

“Shop Talk — Boards, A Pragmatic
Checklist”, Posted on February 4, 2016 by
Big Red Car

at

http://themusingsofthebigredcar.com/shop-talk-boards-a-pragmatic-checklist/#more-4839

are

___21. Make sure that you
discriminate among management, investor,
and independent Directors.

Have an Independent Directors meeting
before the Board meeting. The Independent
Directors should be the CEO’s most loyal
supporters. Make it so.

This is, perhaps,the most overlooked
element of the care and feeding of Boards.

___22. Never, ever confide your personal
challenges to a Board member. Do not
confide in people who can fire you.

Get a CEO coach and be unafraid to cry on
the phone. Get someone who has been a CEO
so they are not taken aback by the crying.
You will do it, trust me. Being a CEO is
hard work.

___23. When dealing with a Board remember
that they will hire you as the CEO and
they will fire you. It is their primary
duty.

Remember, at all times, you are dealing
with people who WILL fire you.

Eighty percent of VC funded companies
replace their CEO in the first four years.
Know this and act accordingly.

Net, don’t confide in, don’t brainstorm
with, don’t discuss details with, don’t
show thoughts in progress to, and don’t
ask advice from members of the BoD, at
least not the non-independent members.

.
Willis is definitely a demi-god.

BRC
http://www.themusingsofthebigredcar.com

http://themusingsofthebigredcar.com/decision-memorandum/

BRC
http://www.themusingsofthebigredcar.com