CEO Tips for Better Managing Investors and The Board

CEOs typically have a solid routine and plan in place for leading their workforce. However, a lot of CEOs consider controlling the expectations of their shareholders and board members to be a kind of dark art.

There is a golden rule to follow: avoid surprises. You’ll keep good relations if you keep your board members informed of any updates, changes, and even potential events. They will even respect you for it.

Here are five strategies that every CEO can employ to lay the foundation for a fruitful and lasting relationship with their board and investors.

1. Consider your board’s makeup

Selection is an important procedure. Make intelligent decisions when choosing your board members to prevent issues and disputes in the future.

On the board, disagreements regarding vision and strategy are unavoidable, but a constructive debate can be helpful. If different viewpoints allow for a productive debate, they can inspire innovation and creativity.

It’s important to think about your board’s makeup. Choose individuals whose personalities and skillsets compliment one another. Ask yourself, what more value can each person bring to the table?

When investors and management have divergent perspectives about the company, some of the most precarious relationships arise. To properly manage the board, it is important to coordinate everyone’s various points of view in order to achieve the best result.

2. Build trust and relationships

Being forthright and honest is key to developing trust. Avoid trying to market to your board too much. Less promises and more deliveries are always preferable. Unfulfilled promises will leave them feeling worse than making no commitments at all. You must convey a realistic outlook because they are not alongside you in the trenches on a daily basis. This will allow you to control their expectations and win their trust and support.

Usually, this trust is developed outside of Zoom calls and boardroom boundaries. You can develop stronger relationships with your board members by spending time with them, going out to dinner, and getting to know them better. This will improve your ability to function as a team. It’s crucial to set aside time to create and nurture these relationships outside of work.

Try to plan group activities for the entire board to participate in, in addition to one-on-one activities with each board member to further strengthen bonds. Activities promote team dynamics and create enduring relationships. The board will be more cohesive once they have bonded, which will be extremely beneficial at later, more crucial points in the company’s development.

3. Effectively communicate to close decisions

To serve your board and your organisation, you must be an excellent communicator. There will be instances when you require the board’s consent before making a major move, like buying a business. In order to do this, you’ll need to rely on your communication abilities to provide a convincing argument and win the board over. The strategy belongs to you because you are the leader. It is your responsibility to clearly explain this plan to the board. The board’s job is to listen, talk about, and argue whether your choices are best for the business.

4. Ensure board diversity

Consider the diversity of your board as well. It is crucial to ensure that your board is reflective of your staff, the clients you serve, and the wider public. Don’t, for instance, choose a board that is made up only of white men with MBAs from Ivy League institutions.

5. Be aware of conflicts of interest

It’s critical to comprehend the board’s function completely. The interests of shareholders in the company are directly managed and safeguarded by the board. Conflicts of interest will be there; it is your responsibility to recognise them and resolve them. When a board member utilises their membership to acquire money directly from their board seat, this can be problematic. Given that Elon Musk has a lot of financial interests that could have influenced how they voted, for instance, a conflict of interest could have developed if he joined the board of Twitter Inc.

The operations of your business are not managed by your board. They simply can’t be as involved as you are since they have other obligations and responsibilities. They must have faith in you. They must feel comfortable enough with you to dispute your choices and tactics at any time. They must contribute to the creation of value and offer plans that will aid in the expansion and success of your business.

Make the board a collection of people that compliment one another. The secret to success is allowing yourself to rely on your board members for their unique knowledge. Drive home your objective and get a good night’s sleep by making sure everyone is in sync and informed, as well as by feeling good about the choices you make each day.