Non Executive Director- Is there a more effective alternative?

Corporate Governance Pressures - CEO Peer Group Support

Corporate Governance Pressures – CEO Peer Group Support

The role of managing director or chief executive officer (CEO) can be a lonely place. There are times for some CEOs when they have nobody to confide in despite having a board of directors. A non executive director may be recruited in order to provide that support, advice and accountability to help them drive a company forward. However, a non executive director has a fiduciary duty to the company and its shareholders which comes before the needs of the CEO. Therefore, the non executive director can never be a true confidant to the CEO.

So is there are an alternative?

This article looks at how a CEO peer group might replace the traditional role of non executive director.

A CEO peer group is a group of Managing Directors and CEOs that meet once a month to process and work through challenging issues so that they can drive their businesses forward. A CEO peer group acts in many ways like a non executive director. However, they have a number of advantages over a non executive director.

  • They are not accountable to the shareholders but to the CEO.
  • Their advice is truly independent as they don’t receive any financial compensation from the company or the CEO.
  • You get up to 15 experienced business professionals working on your problem.
  • You get a wide range of perspectives applied to your challenge from different business sectors.
  • You can discuss highly confidential and sensitive issues that would be difficult even with a non executive director such as a developing an exit strategy if you are an owner/manager.
  • A non executive director will bring with them their network. A CEO group facilitated by a third party will bring with it the networks of up to 15 other people and also the network of the facilitator’s organisation which can be considerable if they are a global organisation.

So in summary, a non executive director can be a great asset to a CEO, however, a CEO peer group amplifies those benefits and does not have the fiduciary downside. Moreover, a CEO peer group is likely to be cheaper than a non executive director.

For more information about a CEO peer group in your area, please go to www.kub-uk.net or call 0845 053 7417

About Peter Dickinson

Peter Dickinson is an experienced chair, director, high growth business coach, facilitator, interim, marketeer, customer services champion, project manager, change management consultant and advisor and has worked with over 300 companies helping them develop a systematic approach to growing their businesses. Working with companies as a chair, high growth business coach, facilitator or interim, Peter will help crystallise the vision, rationalise strategy, identify the most cost effective routes to market including the development of new products, develop a consistent sales approach, champion customer service, streamline processes and identify key performance indicators to help drive the business to meet the goals of the main stakeholders. Peter Dickinson is working with Vistage International to set up two CEO peer group advisory boards for CEOs and Managing Directors in the North West, UK. If you are a CEO or Managing Director of a company with £5 million or more turnover and are open to new ideas, keen to develop your leadership skills, willing to help others and take action yourself then you would benefit from being a member of a Vistage CEO Peer Group. Vistage members on average triple their company rate of growth after joining. If you are based in the North West and are interested in finding out more, call Peter Dickinson on 0845 053 7417 and he can call in for 20 minutes to exchange information of what you can expect from being a member of a Vistage CEO peer group. There is no sales pitch the group has to be right you and you right for the group. LinkedIn: www.linkedin.com/in/e4abusiness (Open Networker) Twitter: www.twitter.com/Enterprise4all Facebook: http://www.facebook.com/KUB.LTD All Social Media Profiles can be found at: http://xeeme.com/peterjdickinson

Posted on July 16, 2012, in Advisory Boards, Business Coaching, CEO Peer Group, Corporate Governance, Non Executive Director, Peer Group Advisory Board and tagged , , , . Bookmark the permalink. 2 Comments.

  1. Peter your article is a great overview of the value many CEOs find in belonging to Peer Groups. I too lead them here in the US and find many do suffer from the sense of isolation given the factors you outlined.

  1. Pingback: How Can The Traditional CEO Peer Learning Group Model Survive in Today’s World? « Suki Mudan

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