Analysing how teams feel about top leadership and corporate direction

In this sixth and final article in our series focusing on why boards of directors (BODs) should pay more attention to HR issues within organisations, we focus on: Executive Leadership Assessment, to gauge how how employees feel about top leadership and corporate direction.

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BODs sometimes do quick assessments if they are concerned about the CEO or senior leadership, or if it is part of a standard cadence set by their oversight guidelines and charter. These initiatives are usually driven by perceived problems or direct negative communication from investors and owners, employees, vendors or customers. Recent scandals at brands like McDonalds and Boeing highlight the need for a regular assessment process, because if BODs aren’t assessing the situation regularly, they may end up with a large, unexpected controversy to manage.

Our recommendation is to implement a regular process of assessing the engagement level of the C-suite and the layer of leadership reporting to the C-suite, with discussion and action plans where appropriate. Here are two ways for BODs to assess the current temperature of the top layers of the organisations they steward:

Access current employee engagement data

We addressed engagement surveys in a previous article, but the difference here is that we suggest the BOD obtain two data sets for them to personally review. Firstly, the C-suite’s engagement scores and responses, and secondly, the results from the cohort of leaders reporting to the C-suite. So, if the company is doing comprehensive engagement surveying, obtaining these data sets are easy. If the company is not yet doing engagement surveying, our recommendation is that at a minimum it be implemented for these two levels.

As we addressed in our previous article, there are a variety of providers of engagement surveying. Alternatively, one could be custom designed using survey software or functionality within whatever HR enterprise system may be in place.

Meet with employee focus groups

Boards can ask for the company to provide a random sample of employees from leadership levels that would have direct exposure to the behaviours, policies and strategies of the C-suite and then facilitate discussions and ask direct questions. BODs may need to be prescriptive to ensure a broad enough sampling of the leadership across functions and locations.

It has never been more important for BODs to develop an accurate view of the strengths, weaknesses and possible risky behaviours of the top leadership. While we previously recommended that BODs review the health of the whole workforce, here we are suggesting a minimum once per year deep dive by the BOD, assessing the engagement levels of the C-suite and those reporting to the C-suite.

Areas of focus for top leadership

In concert with our first four articles, Executive Leadership Assessments rounds out our proposed agenda for BODs. As we said in our introductory article, BODs must of course manage CEO performance and succession, and govern executive compensation programmes. However, we feel that you cannot steward the long-term prosperity of an organisation without looking beyond these typical agenda fillers to better predicters, some of which jumped greatly in impact from the events of last year. To re-cap:

Leadership pipelines – if a BOD is not assuring that proper practices are in place for leadership selection and development, they are allowing a massive risk category to go unchecked. Here’s a prescriptive checklist of questions a BOD can ask.

Healthy workplace assessments – workforces that are disengaged, suffering mentally, and/or experiencing exclusion strip organisations of value. BODs can ensure such issues are being measured and addressed in the ways our article suggests, or face sub-optimal safety, productivity, retention, customer relations, profitability, and shareholder return.

Inclusion & diversity – in May 2020, McKinsey stated that “Over the past five years, the likelihood that diverse companies will out-earn their industry peers has grown. So have the penalties for companies lacking diversity.” A BOD failing to pay attention to this is inviting weak organisational performance, so certain attributes are required of BODs.

Remote working – it has been a gargantuan change to workplaces, but to make assumptions about its benefits or detriments is risky. We provide a list of questions we think BODs should be asking before the gains give way to burnout, lack of collaboration or other possible negatives.

Executive Leadership Assessments – BODs get a lot of exposure to the C-suite and the C-suite in turn gets many opportunities to manage up. That said, how is the organisation really being impacted by the quality of this team’s leadership? As we laid out, there are ways to make this determination that can hedge unseen damage being to shareholder value.

Our hope is that this series has provided practical questions that any BOD could use to introduce a much more valuable agenda for doing their duty, that is shepherding the long-term success of the organisation for the good of all stakeholders.

We welcome questions, input and discussion on these topics, especially for those of you readying yourself to make some of these recommendations to a BOD. Tune in to our next “Breakfast Club” podcast for a broader discussion around these topics. Follow this link to hear our previous discussion on D&I issues.

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Lead Authors:

Chuck Heaton, SPHR, SHRM-SCP is an HRD Thought Leader, CHRO for Camin Cargo, and a global HR Executive with over 30 years of experience leading HR Teams in multi-national companies.

Chuck Kemper is a senior Human Resources Consultant and a global HR Executive with over 25 years of experience leading HR Teams in multi-national companies.

Contributors:

Jason Anderson is Vice President of Human Resources at U.S. Physical Therapy, Inc. with deep domain experience in compensation, accounting, finance and has spent the last 10 years leading HR Teams in multi-national companies

Sanjay Harrichand is the CHRO of Stratum Reservoir and an international HR Executive from South Africa with over 20 years of experience leading HR Teams in the mining and energy sectors.

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