Board of Directors

When It’s Time to Part Ways with a CxO

When it's time to part ways

Having worked with a variety of boards of directors across a variety of industries, we’ve seen a lot of boards part way with senior Chief Officer-level positions. In these interactions, we’ve seen a lot of common elements that  lead up to the ultimate parting of the ways. Members of boards of directors tend to fall into one of three camps:

  1. That was a long time coming – these folks see the writing on the wall long before the final parting of ways. They observe an ongoing sentiment of uneasiness from both sides. They say that it felt as though there was an 800 elephant in the room that someone finally had to address.
  2. We should have seen this coming – this happens slightly less frequently (than the ‘that was a long time coming’) This happens for a variety of reasons, most often they just don’t want to see it coming. They choose to ignore the issue until it becomes so big that it just blows up.
  3. Wow! Didn’t see that coming – this is the out-of-left-field scenarios where the board of directors holds a vote of no-confidence a sitting CxO. These tend to be political and are often tied to scandal or some type of bad publicity.

In most instances, there are signs that led up to the falling out. Some are perceived, others can only be viewed through the lens of hindsight. Here are a few signs that you should be looking for if you sit on a board of directors:

  • Sharp differences of opinion – bright, emotionally invested individuals have strong, passionate opinions about what they think is right. It’s also natural to have conflict where people don’t agree. But in a normal healthy environment cooler heads prevail and people can “agree to disagree” if they know the other side is negotiating from a position of good  faith. Where things get dicey is when people get into irretractable “us vs. them” frames of mind.
  • Breakdowns in communication – when discussions between a companies board and its management to the point that they stop communicating, this is a bad sing and usually means someone’s stay is about to become terminal.
  •  Refusing to be accountable – whenever things are going really poorly, many CxOs retreat to a defensive position where they try to find someone else to blame for a lack of performance. Sometimes they have a valid point, other times they are merely deflecting blame.
  • Ultimatums – when things are going poorly, threats and ultimatums begin to get thrown around. This is typically the last stage before parties part ways. In many cases, the only option available to save face is for the board to ask the CxO to resign or be fired.

Hopefully, knowing these signs will help you to know when things are going south and you can manage the situation more proactively. If you need help finding a new CMO or reconsistituning your C-level suite we can help! Let’s talk!