In the face of unprecedented change and disruption, CEOs need to leverage every source of support to drive their growth agenda. One important, genuine partner may be hiding in plain sight: the board of directors. But many CEOs fail to communicate with their board in a way that maximizes the value of that relationship. Insights from McKinsey’s board service line, CEO Excellence research, and more than 40 targeted conversations with leaders across industries since the start of 2024 suggest dynamic approaches to communicating with the board. This is the first in a series of articles looking at board communication, examining best practices and communication approaches, and spotlighting insights from the C-suite.
The board is responsible for overseeing and guiding the company’s strategic direction, ensuring its success, and safeguarding the interests of stakeholders. At its best, the board serves as a proactive oversight and thought partner to the CEO and top management team, giving them the chance to stress-test, communicate, and discuss strategies that drive outperformance. Further, engaging the board the right way helps CEOs amplify their effectiveness.
CEOs who effectively communicate with the board…
…Build meaningful, collaborative relationships to fuel performance
…Make the board more knowledgeable by delivering by high-impact insights
…Communicate with radical transparency to move at the speed of change
Build meaningful, collaborative relationships to fuel performance
According to our 2019 Global Board Survey, which collated the views of more than 1,000 board directors and 250+ c-level executives, only 30 percent of board members report that their processes―including sharing information and aligning on tasks and activities to achieve a collective goal―are effective. In addition, nearly half of executives surveyed say their board’s performance falls short. The best CEOs invest in their board relationships. They go beyond static, meeting-by-meeting cadences and instead seek opportunities to collaborate and harvest new ideas that spark innovation. They engage on a personal level, cultivating one-to-one relationships with meaningful interaction and engagement.
Make the board more knowledgeable by delivering high-impact insights
The best leaders are continuous learners, and CEOs invest time and energy to ensure that their board is abreast of industry sentiment and trends affecting their business. This effort is necessary: only 10 percent of the surveyed board members feel they have a solid understanding of the dynamics of their industries, and only 21 percent feel they fully understand how their business creates value. To keep them current, effective CEOs curate relevant insights and experiences, including regularly issued board memos, exposure to management teams, experiential moments such as gallery walks and go-and-sees to different offices and factories, and presentations by external thought leaders and academics. Providing these insights and experiences strengthens board members’ trust, understanding, and conviction to drive the business forward.
In our survey, only 33 percent of board members say they received a sufficient induction when they took on the job. A rigorous learning agenda can nurture partnership, clarify roles and expectations, and define what it means to be an effective board member.
Communicate with radical transparency to move at the speed of change
The pace of change and disruption has accelerated rapidly, and companies need to keep up. From 2010 to 2017, headlines that carried the word “crisis” alongside the names of the 100 largest companies on the Forbes Global 2000 appeared 80 percent more often than in the previous decade, due to ongoing trends. In this era of context collapse, compounding risks, and heightened reported crises, CEOs must share ideas, issues, and prospective obstacles early.
This is especially important in interacting with the board, whose members typically work together less than 10 percent of their time. To mitigate fragmentation or misunderstanding, the best CEOs are radically transparent. They share good news fast and potential risks even faster. As former Best Buy CEO Hubert Joly said, “With the board, I was completely transparent on good news and bad news. I had this principle that bad news needs to travel as fast, and probably faster, than good news. And so, the minute you’re transparent with your board, it makes them comfortable. And then you can ask for their help.”1
By enacting a robust, multidimensional communications approach toward their board, CEOs can harness the full potential of a powerful asset and champion for their strategic agenda. Amid continued volatility, rallying the board, building institutional resilience, and catalyzing growth are more important than ever.
In our next article, we’ll examine different communication approaches to engaging the board effectively.
1 Carolyn Dewar, Scott Keller, and Vikram Malhotra, CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest, Scribner, March 2022, p. 162.