How New CEOs Can Start Off On The Right Foot With Their Board

As they are promoted to become the CEO, many senior leaders view this long-awaited step as the pinnacle of their careers. Finally, they are about to occupy the top spot in the organization—setting the priorities, determining the strategy, allocating resources, and developing the best talent for the team.

For many, an unexpected challenge is looming, which new or aspiring CEOs may not be fully prepared to meet: their relationship with the board of directors. Here’s how I explain the dynamics, based on my own experiences as a CEO and as a board member and chair.

First, it’s important for incoming CEOs to reflect on the fact that, in each position along their career path, they have had only one boss. In addition, each of these bosses previously held senior management roles in the company, making them very familiar with the responsibilities of the job. Now, as new or aspiring CEOs, they are about to have as many as 10 or even 15 bosses—otherwise known as the board of directors.

Not only that, but CEOs will also report to board members who have never worked for the company, including many who have no experience working in the industry. For example, when I became CEO of Baxter International, a $12 billion health care company, one of the board members had a background in restaurant management. He knew a lot about food service, but nothing about health care.

Such challenges can generate friction, even to the point of an adversarial relationship. As a McKinsey report noted in 2023“Poorly managed, the relationship between the CEO and the board can devolve into a loss of trust and paralyzing ineffectiveness.” The prospect is even more daunting when considering research that shows as many as 25% of corporate boards are dysfunctional.

Consider what happened at OpenAI, when Sam Altman, founder and CEO, was fired by the board, which accused him of ineffective communication and misinformation. About a week later, Altman was reinstatedamid protests within the company over his removal, and the board was later shaken up. The question remains: how much of this unproductive drama could have been avoided if both the CEO and the board had focused more on their working relationship?

A Positive Relationship Starts With Setting Expectations

Given my experience as both a CEO and a member of more than 20 boards, including Leidos and OptionCare Health, I am frequently asked by new and aspiring CEOs for 8advice on how to establish a positive and productive relationship with their board. My advice can be summed up in a four-step model that applies broadly in values-based leadership, especially to build rapport and reduce frustration and conflict with the board.

The first step in the model is to set clear expectations for both sides. From the board’s perspective, expectations cover how often they want to meet with the CEO, the level of detail to be discussed, and that the board wants to hear not only about what’s going well, but also about the major issues and challenges facing the company.

For the CEO, it’s reasonable to expect every board member to be on time for every meeting and come prepared to challenge management in a respectful way. Arguably, the biggest expectation is that board members will know the difference between management and governance. I often reflect on the advice I received from William Grahamthe long-time chair and CEO of Baxter International: “Management manages, and boards govern.”

When these expectations are well understood by both parties, everything works smoothly. It’s far easier to practice values-based leadership, such as prioritizing the values of the company and its leaders and encouraging healthy debate for a balanced perspective.

However, I have seen many cases where either the board gets overly involved in management or a weak management team relies on the board to manage. The result is confusion over whether the CEO or the board is actually running the company. Often, chaos and unnecessary drama ensue.

One of the most tumultuous examples has been Disneywith yet another change in board leadership and another CEO search in the works. In addition, the company engaged in a costly proxy battle after activist investor Nelson Peltz and former Marvel CEO Ike Perlmutter tried unsuccessfully to win board seats. Now, Disney’s board will soon get its fourth chair in three years with James Gorman, CEO of Morgan Stanley, taking that position. On Gorman’s agenda is finding a successor for CEO Bob Iger who is expected to step down for a second time in 2026. Iger retired in 2020 but came back two years ago after the company fired then-CEO Bob Chapek. Now, establishing a good working relationship among the board members and with the new CEO clearly must be a priority.

Communication, Expectations And Consequences

Once expectations are set, the second step is to communicate clearly and often. I have seen many situations in which management did not keep the board up to date on an important issue and the board was taken by surprise. (Certainly not healthy for a new CEO). Neither boards nor management want to feel blindsided.

When expectations are set and clearly communicated, the third step follows: holding each other accountable. If expectations are clearly defined and communicated, the board should be very comfortable in holding the CEO and management accountable. If management is not held accountable, no one should wonder why the company lacks discipline and credibility, resulting in a lower stock price.

Finally, the fourth step is to understand the consequences for both making and failing to meet the expectations. If expectations are not met, CEOs should not be surprised if they are no longer running the company. Similarly, board members who do not foster a healthy challenging environment, or who continuously overstep their governance responsibilities, should be removed from the board. And, when expectations are met by all parties, the reward is a higher performing company and a rising stock rise.

As new CEOs take the reins of the company, they cannot lose sight of the importance of establishing a positive working relationship with the board of directors. Good rapport helps ensure a successful and smooth transition for the incoming CEO and better management across the organization.