Publication

Members have long recognized the importance of the CEO–lead director relationship  and used the March 1, 2011 meeting to examine it in detail. This issue of ViewPoints offers perspectives from Fortune 500 lead directors on the intimate, nuanced relationships at the heart of corporate governance. Members focused their comments in two broad areas, which are discussed in detail on the following pages:

• Factors affecting the CEO–lead director relationship
  Members emphasized that no two CEO–lead director relationships are the same. Nevertheless, members recognized three central factors that define the relationship: (1) prior experiences of the CEO and lead director, (2) the unique challenges and opportunities facing the company, and (3) company leadership structure. Contrary to the prevailing view, members agreed that in their experience, the lead director’s title (“non-executive chairman,” “lead director,” or “presiding director”) has not affected the relationship or the lead director’s responsibilities.

• Lead director responsibilities and the CEO–lead director relationship
  Members commented on the unique balancing act they perform in interacting with the CEO and board members. They considered how responsibilities such as agenda setting, facilitating productive meetings, and establishing the frequency and content of CEO communications affect their relationship with the CEO, the relationship between the CEO and board, and company performance. By consensus, members agreed that their most important responsibility is chairing the executive session. They also noted the importance of evaluating the CEO and said that lead directors have a responsibility to support the CEO until the board reaches a consensus that the CEO demonstrates serious deficiencies.