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.mdgrowthboard.co.uk or call 0845 053 7417