First-time CEO's: Managing the Board

What do you believe the biggest challenges are for first-time CEOs?

The first thing you need to reflect on as a first-time CEO is that the buck really does stop with you. There is nowhere else to look. The board looks to you for everything that goes on in the company. It doesn’t matter if you’ve never been a lawyer; you’re responsible for making sure you don’t get into trouble legally. It doesn’t matter if you’ve never worked in finance; you’re responsible for the cash flow of the company. It doesn’t matter if you’ve never worked in HR; you’re responsible for the culture of the organisation from top to bottom. It doesn’t matter if you’ve never worked in sales; you need to turn up to sales pitches and be impressive for your customers. There is no place to look, other than the mirror, to say who’s accountable.

Another challenge for first-time CEOs is managing the board. Up until the CEO level, with the possible exception of maybe a CFO or something like that, you’re not really managing the board. You’re managing a team that has work to do. When you get to CEO, “I’ve got people who own this company and sit on my board. This is their money. Woah. Why did they invest in this particular company? What do they expect? Are we aligned on what to expect? How do I manage them when they’re part-time and I’m full-time? I don’t want to overload them, but I don’t want to underload them. How do I use them as a sounding board?” Managing the board is a very new thing for all CEOs.

How do you deal with that?

I met with each board member and said, “How shall we work together?” one by one. With each board meeting, we carved out 15-20 minutes at the end to say, “Is this the right format for a board meeting? Are we meeting at the right frequency? Do we talk about the right subjects? As per the last board meeting, this is what we’re going to talk about; is there anything else you want to add to the agenda?” Like all leadership, not saying, “I know how to manage the board,” but saying, “How should we manage it together?”

Ultimately, as a CEO, you are accountable for making sure it works well, but it doesn’t mean you have to design the process. You have to ask people what they think is the right process and then muddle through and keep improving. Another thing with first-time CEOs is very often, you’re in the news, talking to journalists and going on TV. Depending on how confident you are, you might want to get public speaking or TV training and think through how you work with journalists. What do you say? What do you not say? What story do you want to shape, etc.?

Something I’ve done in some jobs, especially if I had a particularly good PR department, is start doing off-the-record meetings with journalists frequently, so when either a crisis or a really interesting story hits, I can get through to them quickly.

There was a fun situation — fun in hindsight; it wasn’t fun at the time — when I was running Adknowledge. Adknowledge owned AdParlor, which was a company that did lots of Facebook advertising, among other things. One of our employees was talking to analysts about our results on Facebook and wasn’t really filtering them very well. They said, “Our spend on Facebook dropped from Q4 to Q1 by 18%.” What he didn’t say is, “Seasonally, we would normally drop 15% anyway,” so he just said this number with no context. The Facebook stock dropped 3% within about an hour of that call. That’s $12 billion wiped off the value of Facebook. Luckily, Mark Zuckerberg and Sheryl Sandberg were on stage at a big conference. I managed to get through to the Wall Street Journal and Bloomberg within a few seconds and got it fixed, and before they came off stage, the share price was back up to where it had been.