Jan 01 1998

Consensus Building Strategies for Productive CEO-Board Relationships

Report  
Number  
35

This study evaluates the mutual expectations that directors and CEOs have toward one another and determines how the degree of consensus about these expectations influences the working relationship.

William L. Donkersgoed
Sprint
Jacob E. Hautaluoma
Colorado State University
Janet E. Pipal
Advanced Behavioral Solutions
Report Number 35

Executive Summary

This is the third in a series of Filene Research Institute studies on credit union CEO-board relationships. The first evaluated how board tasks, work styles, and other characteristics influenced the effectiveness of a credit union in carrying out its mission.

The second study established elements of a good CEO-board relationship, identified barriers to a good relationship, and identified ways to repair poor relationships.

The present study evaluates the mutual expectations that directors and CEOs have toward one another and determines how the degree of consensus about these expectations influences the working relationship.

What is this research about?

"Role theory" has proven to be a valuable tool in a variety of institutional settings to assess organizational problems and possible solutions. According to role theory, the more that interacting individuals or groups share similar expectations about their respective roles in the enterprise, the better quality of their working relationship. To better understand role expectations and working relations in credit unions, board members and CEOs from 144 credit unions answered a series of questions related to expectations of their own role and the role of their counterpart.

What are the credit union implications?

The mutual expectations of credit union directors and CEOs about their respective roles critically affect the quality of the CEO-board relationship. To restore strained relationships and enhance good ones requires that directors consciously identify two key elements:

  • Identify what they want the CEO to do, then work toward a strong consensus among themselves on this issue.
  • Identify how directors go about their tasks, then again work toward a consensus. In addition, they must convince the CEO that the method they choose is an appropriate work style for the board. 

This report is sponsored by the Center for Credit Union Research at the University of Wisconsin - Madison.