On the crucial relationship between the Chair and the CEO

The board is responsible for appointing the CEO, and the relationship between the Chair and the CEO is crucial – but often not easy. So what matters when selecting a CEO, and how can we establish and develop a good relationship between the Chair and the CEO?

In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses the crucial relationship between the Chair and the CEO with Sir David Norgrove, currently a Governor at the University of the Arts and Chair of the aBDRN Financial Fairness Trust. Sir David has held a number of chairing roles, including the Pensions Regulator, the Low Pay Commission, the UK Statistics Authority, the Family Justice Review and Family Justice Board and Pensions First, a software business. His early career was at the Treasury, at First National Bank of Chicago, and as Private Secretary to Prime Minister Margaret Thatcher. This was followed by Marks & Spencer from 1988 to 2004, including as a member of its Board.

“It’s important to be on the shop floor and to see what’s going on.”

Sir David relates that during his 16 years at M&S, he worked under three chairmen, all of whom held the dual role of Chair and Chief Executive – an approach less common today. While the third eventually separated these roles, the first two were dominant and highly authoritative figures. Their leadership styles came with significant drawbacks, particularly a reluctance to encourage challenge or dissent. Too often, the board acted as a rubber stamp for their decisions. Despite these challenges, Sir David learned valuable lessons. He observed the importance of deeply understanding the business, especially in retail. This meant being present on the shop floor, observing operations, and engaging with both staff and customers. Every weekly store visit offered new insights, from issues to address, questions to ask, and opportunities to act on. This hands-on approach became a cornerstone of his leadership style, influencing all his subsequent roles.

He believes there is no substitute for being present on the shop floor, and during his time at M&S, senior management expected it. Sir David sees this practice as immensely valuable, complementing more formal engagements such as away days on company sites. While such events show employees that leadership cares and takes an interest in their work, he believes informal, one-on-one interactions while wandering through the business are equally, if not more, impactful as these moments foster genuine connection and offer a deeper understanding of the organisation.

“The dictatorial approach is subtle, but it’s still there.”

Sir David reflects on past experiences in the boardroom, acknowledging that standards were quite different decades ago. He recalls unacceptable behaviour, with a culture of bullying and a dictatorial approach that at times crossed the line. He believes this leadership style was deeply damaging to the business and carried that lesson with him into his later roles. He notes that such overtly authoritarian approaches are less common in public sector organisations he has worked with since, though subtle traces of them still exist in some private sector companies. However, Sir David also observes great progress has been made over the years. He believes there is a genuine recognition of the importance of listening, teamwork, and openness—values far less prominent thirty years ago.

“So what motivates me?”

Sir David reflects on what motivates him to take on roles, emphasising the unique flexibility of being a non-executive. Drawing on the words of a Latin poet, he notes that while changing the scenery can be enticing, true fulfilment comes from engaging the mind. He considers himself fortunate to be in a position where financial necessity does not dictate his choices, allowing him to focus on roles that genuinely interest him, such as his long-standing involvement with the British Museum – work that aligns with his passions and values. For Sir David, it is essential that the roles he takes on not only matter but also play to his strengths. This balance of interest, relevance, and personal fit has been a guiding principle in his career since retiring, and he feels privileged to have the freedom to pursue it.

“Having the right CEO is the number one, two and three most important things for a chair.”

Sir David emphasises that selecting the right CEO is the most critical responsibility for a chair, ranking it as priorities one, two, and three. He believes that the wrong appointment can strain the chair/CEO relationship and lead to organisational unhappiness and failure to meet objectives. While acknowledging the difficulty of defining the perfect CEO, he recognises the need for trade-offs. It is impossible to find someone who combines the entrepreneurial drive of Elon Musk with the Buddha’s deep human understanding of others. Instead, he focuses on core qualities. A CEO must be direct, transparent and willing to speak openly about issues. For Sir David, trust is the foundation of the chair/CEO relationship; without it, success is impossible. Beyond trust, the CEO must meet the key criteria established during recruitment, often decided collaboratively with a panel. He accepts that compromises are sometimes necessary, but there are always two or three non-negotiable qualities, and if these cannot be found, he firmly believes in restarting the search to find the right candidate.

“All you can do is trust your instinct – and that can be wrong.”

Sir David acknowledges the inherent challenges of assessing candidates, especially in determining whether they meet the criteria and trust can be established. However, he believes no process can guarantee absolute certainty, as ultimately, decisions rely on instinct, which is not infallible. He highlights differences between public and private sector recruitment processes. In the private sector, there is more flexibility to spend meaningful time with candidates, allowing for a deeper understanding – walking the shop floor, having lunch, or having informal conversations. Public sector processes, by contrast, are often more formal, relying on structured panels and rigid questioning, which he feels may not reveal the qualities needed for the role and can increase the risk of appointing someone who isn’t the right fit. He acknowledges that even with thorough processes, mistakes happen, and history shows that CEOs are often removed within a year or two, underscoring the difficulty of making these decisions.

“The person you’re talking to is the Chief Executive. He’s not your underling.”

Sir David believes building and maintaining a strong relationship with a CEO requires adapting to the individual’s character, as no two relationships are the same. He emphasises the importance of regular, consistent communication, which often takes the form of a weekly meeting or phone call to discuss what’s happening in the business, address mutual concerns, and ensure an open line of dialogue. He also reflects on the need for self-awareness in his approach. Early in his career, a mentor advised him to focus on asking questions rather than giving directives, emphasising that his role was to guide rather than dictate, and he has strived to live by this since, understanding that a CEO is not a subordinate but the leader of the organisation. By asking questions and fostering discussion, the chair can help CEOs reach conclusions and make decisions rather than steering them too forcefully. This balance, he believes, is key to a successful and respectful working relationship.

Sir David explains that the nature of meetings with the CEO depends on the size and scope of the organisation. As chair of a very small organisation with team members based in Scotland and England, he primarily relies on phone conversations, typically weekly, and physical meetings are rare because, given the organisation’s size, there is less demand for frequent in-person interactions. In contrast, he emphasises the importance of regular face-to-face meetings for larger organisations. Typically, these would include a meeting before or after one of the 10 or 11 annual board meetings, allowing time to discuss matters in-depth and often a second in-person meeting during the month. In his experience, two physical meetings per month are sufficient to maintain a strong working relationship with the CEO while addressing key organisational needs.

“After a crisis, after an organisation had a difficult time, chairs or directors get sometimes too much involved, and then don’t understand when it’s time to let loose again.”

Sir David believes that a CEO plays a crucial role in maintaining a strong relationship with the chair by fostering transparency and trust. He emphasises the importance of being open and honest, advising CEOs to communicate what’s happening without trying to obscure challenges. He stresses that once trust is broken, it is nearly impossible to rebuild. When it comes to the board’s role, he acknowledges that directors typically have less contact with the CEO than the chair. However, he finds it helpful when a non-executive director provides feedback on how the CEO feels or shares insights they’ve picked up within the organisation. Occasionally, such feedback has highlighted issues with his actions, such as becoming too involved in operational details. In these instances, he has directly raised the concerns with the CEO, leading to constructive discussions and a mutual understanding of boundaries. Sir David values this dynamic, as it supports the relationship and ensures it remains effective and collaborative. He observes that after a crisis or a challenging period, chairs or directors can sometimes become overly involved in the organisation’s operations, struggling to step back once the situation stabilises. This tendency often stems from anxiety – concerns about whether the CEO or relevant director is taking the necessary steps to address the issues effectively, and he believes this is where honesty from the CEO becomes even more critical. Clear and open communication about progress (or lack thereof) can help alleviate this anxiety and rebuild trust. By being transparent about developments, the CEO enables the chair to regain confidence and establish an appropriate balance of involvement, ensuring the organisation moves forward collaboratively and constructively.

The two top takeaways for effective boards from our conversation are:

• Have the right CEO. If the CEO isn’t right, then the CEO should go.
• Ask questions. Get out and about, go and visit places and sit down with people, get them to tell you what they’re doing. There’s no substitute for it.

 

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