From Sheree Anne

Hey, CEO. You Are at Risk - Right Now


Hey, CEO. You Are at Risk—Right Now 

I’m sounding the alarm, because I am witnessing a record number of CEO firings. It’s not isolated to certain chamber sizes, regions or even tenure. It’s happening at every level. 

In a startling number of cases, there’s little to no warning that a termination is coming.  

Some are quietly pushed out the door while others are ousted in spectacular public fashion. Exits are met with bad sentiment and sometimes negative press that impacts the individual, the chamber and the community. 

These departures upend organizations, disrupt lives and livelihoods, and erode trust among all stakeholders. Trust in leadership, trust in boards and trust in the chamber brand are damaged.  

The Top Causes of Recent Terminations 

Some departures are primarily related to the leader, ranging from a skills mismatch, to lack of transparency, to inability to leverage the necessary diplomacy for the role, to insubordination, to outright fraud.  

In other cases, dynamics within the board are dysfunctional at best and toxic at worst. 

More often than not, it’s somewhere in between. Most examples I’ve witnessed could’ve been prevented. So, what are the top vulnerabilities?  

 

Board Relations 

Who leads your board matters a lot. Those decision makers have to be trusted by the community and there must also be deep trust between the board and the CEO. Where do things go wrong?  

Board composition: Who serves matters. So does how they’re elected. Is it representative of the variety of businesses, leaders, industries and perspectives in your market? If the board is too small, it’s easy for one strong voice to sway the group in the wrong direction. Too large? That can leave smart members feeling unengaged, and then they don’t plug in when you need them. 

Lack of clear roles and responsibilities: All too often, chamber board members are well intentioned, but may not have served in a volunteer leader role like this. They don’t know where their role ends and the CEO’s role begins. Boards are responsible for vision and strategic insight; the CEO and staff are responsible for the day-to-day management and execution of that vision.  

Need for training: Training can clarify who does what, plus set norms and give context to the complex work chambers do. Basics like: chambers serve the best interests of all businesses, not just one board member’s; advocacy requires political savvy; and boards don’t make decisions on, or give guidance to, chamber staff beyond the CEO. But board members don’t know these points without training.  

Intentionality & shared vision: Mutually shared vision and clear goals between the CEO and board drive organizational direction. Each new chair doesn’t get to set their own agenda. Priorities align to the board-approved plan. If there’s disagreement and a CEO tries to push their agenda without situational and self-awareness, it often backfires. Consensus-building, and sometimes even campaign tactics, are essential to drive change.  

Transparency: There should be no surprises, both ways. If you see early warning signs of potential issues, they should be shared with the board. The board should likewise bring potential risks to the CEO. Messaging and timing are important. You don’t want to unnecessarily worry stakeholders, but you should lay preventative and preparatory groundwork. Where possible, put a volunteer leader between you and a problem if one occurs.  

Relationship care and feeding: Cultivating strong relationships starts you off on the right foot, but it’s important to keep it going. Schedule regular meetings with top leadership. Connect with board members who miss meetings or aren’t speaking up. Allow for structured feedback opportunities. Engagement should align with the highest use of board members’ time. They have full-time jobs, but if they feel left out, they’re more likely to get involved where you don’t want them - in the weeds. Most times when a board “goes rogue,” the CEO has lost connection with a handful of persuasive members who chart their own path.  

More From ACCE:  

 

Employment Contract 

If you don’t have an employment contract, this is your top personal vulnerability. Without one, your chamber is also left vulnerable.  

Sets terms of employment: Clarifies roles, such as the CEO has sole authority to hire, fire, manage, and compensate all other staff, subject to the approved budget and policies.  

Compensation and benefits structure: Including when and how compensation is assessed and/or amended. 

Sets a CEO review process: Structure for a personnel committee, CEO review and cadence are usually included. Clear annual goals should be set, with regular check-ins, feedback, and a formal review process, plus a system if things aren’t going well.  

Termination clause: If a board wants to part ways with a CEO, without cause, it triggers a severance package.  

If a Board is resistant to a contract, they need to know it protects them too.  

A good contract reduces organizational liability due to ambiguity around expectations. CEO contracts can include restrictive covenants like noncompete and non-solicitation clauses. They can also feature IP protections, confidentiality agreements and require notice periods so a CEO doesn’t depart quickly, leaving a leadership vacuum.  

More From ACCE:  

Financial Missteps 

There’s a wide spectrum of financial missteps from mismanagement to malfeasance, with terminations stemming from actions at every point on that range. For a leader who lacks integrity and commits fraud, the financial, reputational and collateral damages are wide sweeping and go far beyond just the chamber.  

Know what you don’t know: CEOs and non-financial leaders need training including the basics of accounting, understanding financial statements, budgeting, forecasting, and financial management best practices. Boards often need support too.  

Oversight: There should be clear roles for a finance committee and treasurer. It’s their responsibility to monitor, assess and mitigate risk. They should understand the budget versus performance. Regular financial reporting to the board, where questions can be asked and trends assessed, encourages transparency and additional layers of insight. 

Processes & procedures: Systems like segregation of duties, multiple reviews and signatures, conflict of interest policies, a written financial policy, audits and financial reviews all support stronger financial controls. Thorough budget review, regular projections and cash flow tracking can identify potential challenges in enough time to allow for mitigating efforts.  

Ethics: When boards and senior leadership have a zero-tolerance policy for fraudulent activity, it reduces the risk of malfeasance. Incentivizing transparency, compliance and audit cleanliness reward behaviors that support organizational health. ACCE’s CCE certification has a curriculum with emphasis on these topics, plus an ethics policy participants must sign off on.   

More From ACCE:  

 

While you may feel secure, I know recently terminated leaders from large and small chambers, some with extensive histories of industry leadership, who also felt secure just before getting let go. Going back to the basics can make all the difference for you and your chamber.  

We’re here to help. If you’d like support beyond the resources outlined, or you’re facing a challenge, reach out. I’d be happy to connect.    

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