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CEO Evaluation

November 18, 2015

Posted in: WATSON Views

The greatest leaders are also passionate learners. Great leaders are open to feedback and continually incorporate learning into every aspect of their professional lives. However, challenges arise when these individuals transition into CEO roles and no longer have processes in place for high quality feedback and learning opportunities. There is nothing is more frustrating than throwing your shoulder into an endeavour and receiving no feedback on whether you were successful or completely off-course, which begs the question: why is there so often a lack of adequate CEO feedback?

Why do many organizations lack adequate CEO evaluation processes?

  1. Lack of recognition: Although many organizations have processes in place to regularly assess employees, the need for CEO evaluations is often forgotten. It is easy to allow CEOs to operate in their roles without critically thinking about the tools they need to grow, most notably, the CEOs that are performing consistently well. However, even high functioning executives need structured feedback from those around them. There is no limit to how well an executive can perform, and by implementing constant channels for feedback, an organization is able to grow and adapt to the environments in which it operates.
  2. Sense of awkwardness: The idea of providing feedback to your own CEO can be daunting, and without a formal process or direction on how to effectively deliver constructive feedback, many employees and board members shy away from contributing their insights that could ultimately improve their organization’s operations. This is why it is the responsibility of the board to implement the proper processes to allow open conversations and high quality feedback.

How can a board improve the CEO evaluation system?

Ensuring you have the leadership your organization needs is one of the board’s most critical responsibilities. In order to accurately measure effective leadership, boards must have a strong process to monitor, evaluate, and support CEOs. If you are not evaluating your CEO’s performance, you could be in for a surprise, and this is a risk you should not tolerate. If you are not evaluating your CEO well, it’s a huge missed opportunity. By creating a CEO evaluation process you are providing fair and objective data upon which the board can evaluate the performance of the CEO, as well as meaningful developmental feedback for the CEO. Therefore, boards are encouraged to design processes keeping the following points in mind:

  1. Education is key: Ensure employees and CEOs are educated on what good feedback looks like and the importance of being flexible to allow for issues that may arise.
  2. Don’t underestimate how sensitive feedback can be: If the evaluation process is new, the CEO may not necessarily be used to receiving feedback. Having a third party, impartial mediator present will help communicate feedback in a constructive manner. Remember, bad feedback can be damaging, good feedback can be incredibly valuable.
  3. Don’t underestimate the importance of the conversation(s): Implementing these processes is not only about the feedback; it’s about starting the conversation. After reviewing the feedback, it is critical that the board has the opportunity to think about the feedback and what is most important. Similarly, it is critical that the board chair is set up to have a meaningful conversation with the CEO about the feedback and the actions needed to continue to grow in the role.

At WATSON boards are our business. We specialize in creating and implementing systems for CEO evaluation tailored to your business. If your board wants to improve operational process, contact us. To continue exploring the importance of CEO evaluations, read the recent CSAE article contributed by WATSON: “Trends in CEO Evaluation: The Powerful Connection between Leadership and Learning.”

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