Strong CEO, Strong Chair or ... Both?

So what is better, a strong chair or a strong CEO? This is a question I often hear asked or see being silently struggled through in the credit unions I consult with. Sometimes the chair controls the organizational agenda and the CEO merely does his or her bidding. More often than not, though, the CEO is really in charge, playing a strong role in guiding the board as well as the operations.

In either of these two options, two people are trying to figure out how to do the same job, and the credit union is getting short changed. Having two people on the same job rarely adds much value. But what else is there?

There is a third option: having a strong chair and a strong CEO.

But wait a minute, didn't I just say having two people do the same job is not a great idea? Here's the catch: Both leaders can be strong if they have different, but complementary jobs. In other words, it works if the CEO and the chair each has a distinct job which, when combined with the other, accomplishes more than either would alone.

This became clear to me largely as a result of studying John Carver's Policy Governance® Model but it works elsewhere as well. Having two strong leaders, focused on different areas and functions of the credit union, creates more benefit to the members than if there is one focus for both positions.

Can this actually work? Yes, but there are several different pieces needed to work through the puzzle. Here's a brief discussion of the four I find to be most important.

Separate and Defined Roles

If two people have to work together and depend on each other, it is important that each one knows what his or her job is and that the two jobs don't have a lot of overlap. It helps to recognize that when it comes to the chair and the CEO, both positions work in a longer "line" of authority. Members start with all the authority and elect a board to represent their interests; then the board usually hires a professional manager to actually get things done. Being specific about where the chair and CEO jobs start and stop within this line of authority is the first step to doubling your leadership firepower. Ideally the two roles will be defined, mutually agreed upon, and recorded for future reference.

One way of doing this is to see the chair as representing (for the board) member interests at the broadest level. This might include focusing on helping the board do its work of defining what the credit union should be creating for members, setting parameters to keep the credit union safe, hiring the CEO and delegating the task of getting it done to that CEO. The CEO could then focus on the decisions and actions needed to do what the board has defined.

Create an Atmosphere of Trust and Open Communication

Just defining the two roles doesn't ensure they will function as a team. There are almost always some grey areas between the two roles and some new and unanticipated issues that neither role is defined to cover. There is also a strong likelihood that the two positions will serve as a valuable source of coaching and insight to each other. To deal with these types of situations, the chair and CEO will also need a strong personal relationship, one of mutual trust built on open communication.

Trust is formed when someone does what they promise over time. You can count on them and know they will act in your shared interest. This requires that commitments are made on both sides about how things work and that each individual makes sure they keep these commitments.

Open communication means that, in a trusting environment, the two can talk to each other honestly, even about topics that are really hard or uncomfortable. Each must value the other's perspective and viewpoint. And that usually takes both a framework for having tough conversations and getting to know each other as a person, not just a partner.

Clear Expectations

The commitments mentioned above are best framed around important expectations. It is important for the two positions to clearly and mutually agree on how they will interact and as to what outcomes are expected of the CEO. Some credit unions only vaguely describe CEO performance expectations, their range of authority, or how they will interact with the chair. Vague definitions lead to multiple interpretations, which can lead to different pictures, which can lead to different ideas of what should be done, which (when carried out) can lead to major frustrations, frictions and disappointments.

Trust AND Verify

Trust is an important element, but the chair, and the board he or she represents, must also fulfill their duty to the members—both to make sure the credit union is creating the right stuff and that it is being operated in a safe and ethical manner. Trust is built upon kept promises and the only way the board knows they are kept is if they monitor actual performance regularly. If the board has clearly defined its expectations, monitoring and checking can be as simple as measuring what actually happens against the expectations the board defined and delegated to the CEO.

Using these four simple, but not necessarily easy, components to frame how the chair and the CEO work together can indeed allow the credit union to fully utilize the expertise of both. By building a strong relationship, communicating openly and honestly about everything, setting clear performance and decision expectations, and fairly but seriously checking to see that they are accomplished, both of your leaders can be strong.

As a result, both can add positive and unique value to the credit union, which in turn can then create more value for your members.

Eric Craymer is president of Growth Management Consulting, Inc. and has been working with credit union boards and managements on various issues for several years. This work includes strategic planning, board development, operational planning, marketing, and management coaching. He knows both the theory and the practice, having been a business owner, researcher and consultant. Eric holds an MBA in marketing, is a Certified Managerial Accountant, and is a graduate of the Carver Policy Governance® Academy.