How does your board see your performance?

Finding out what the board thinks about your performance as a CEO isn't always straightforward.

If you’re a CEO of a VC-backed startup, the chances are you have a board of directors that includes some investors you raised money from. Knowing what they think about your performance as a CEO is crucial but not always straightforward. In this essay, I’ll discuss how to approach this

(This essay is adapted from my upcoming book Startup CEO Succession: a Founder’s Guide to Leadership Transition. I share some feedback from early readers at the end of this post).

It’s important to know what the board thinks

Without a doubt, your board has a perspective on your performance. Given that they are on the board so that they could fire you if needed, they are, individually and collectively, somewhere on the spectrum from “the CEO is great” to “the CEO needs to be fired urgently”.

In most cases, the board is either happy with the CEO or willing to give them a chance to grow because firing a CEO is a last resort due to its risks, especially before solid product-market fit.

If you’re considering stepping down as a CEO, understanding how the board sees your performance is essential because it will impact your approach to your own succession. First of all, if you have reasons to suspect the board might be considering letting you go, this can be an argument to take charge of the process yourself. Making the first move here can be advantageous.

Second, the better the board's opinion of your performance, the stronger your negotiating position and the more input you’ll have into the process, even if you’re not the only decision-maker. For example, you’ll likely have more influence over who your successor will be, even if it is the entire board’s responsibility to appoint them.

If you misjudge the situation by assuming that the board has a poor view of your performance when that’s not the case, it can prompt you to make suboptimal decisions, such as stepping down when it would make more sense to stay.

However, even if you don’t plan to step down, you must know what the board thinks of your performance.

Learning to read your board

The trouble is that boards can be hard to read. Board members have every incentive to proclaim full and unconditional support of the CEO until they decide to fire them. This is because telling a CEO they’re doing a bad job to the point of risking being fired will likely make it more challenging to work together without any obvious upside.

This can also have legal implications. If the CEO resigns and then takes things to court, an employment tribunal can interpret it as constructive dismissal (pushing someone to leave without firing them). This will be painful, distracting and expensive, so startup boards usually avoid this scenario at all costs by giving the impression that the CEO is doing alright until the end.

If you find yourself in a potential constructive dismissal situation where you feel like you have no choice but to leave because of how the board is acting towards you, immediately contact an employment lawyer.

However, things rarely get this bad. If your working relationship with the board is good, you can gauge their sentiments by doing a few things. One is talking to the board about your performance in terms of company performance instead of yourself.

Start with your own job spec. What is yours? The best framework I’ve seen comes from Fred Wilson, a VC. The CEO has only three jobs: hold the vision, build the team and give them resources to win.

If you sit down with your investors individually and ask them to share their thoughts on how aligned the team is around the vision and strategy, how good the team is, etc., you’ll get the data you need to draw conclusions. 

If your lead investor says that the vision is muddy, the strategy confusing, the team is second-class, and they’ve been wondering why the company missed its budget again, but they have full trust in your ability to solve all of this very quickly, don’t get complacent. That was an assessment of you as the CEO, not the business.

You can also run a 360-degree review process, engaging an executive coaching firm to interview every board member about the CEO’s performance individually. Having a trained and objective intermediary to debrief 360 findings with provides additional perspective.

Finally, these conversations must happen regularly, starting when the board is formed, not just when you’re considering stepping down. You can strengthen your relationship with the board and better understand how they perceive you and the business by regularly discussing your and the company’s performance.

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Early feedback on the book

I’m preparing to publish the book in about two months’ time. I gave the draft to some early readers, and they came back with feedback that exceeded all my expectations.

“a unique perspective distilled from the author's personal journey, both as a former Founder CEO himself, but also the rich insights from having coached countless other CEOs in transition”

Leila Zegna, General Partner at Kindred Capital (and a subscriber!)

“an outstanding book on an underserved topic and I would strongly recommend it to all leaders whether you’re looking to transition, delegate better or simply live a more fulfilled life. “

Simon La Fosse, Executive Chairman and Founder and La Fosse

“Evgeny’s remarkable perspicacity and emotional intelligence sets him apart as a modern business philosopher.”

Rod Banner, chair, investor, CEO at 3LA.com

“A must-read for founders and investors wanting to better understand founders!”

Jonathan Lerner, Partner at Smedvig Capital (and a subscriber!)

“This book was my bible for navigating this major life change - written by a real expert, with great compassion and detail”

Dan Murray-Serter, co-founder of Heights, host of Secret Leaders

“an insightful framework for understanding yourself, assessing the reality of where you are as a leader, and making decisions”

Gi Fernando MBE, chair, investor, serial entrepreneur

“Evgeny brings a perspective that comes direct from the frontline, the boardroom and the other side of the table. His insights are substantive, empathetic, honest and most importantly, highly practical.”

Gabbi Cahane, General Partner at Stride.vc

“Very few people have successfully transitioned out of the CEO role. Even fewer have coached dozens of others through the process. 

Evgeny has done both and his book is invaluable guide for anyone involved in a CEO transition - Founder, CEO or board member. 

You can’t afford not to hear what Evgeny has to say.”

Jamie Undrell, Founder and Chair at SaveMyExams (and a subscriber!)

There are many more and they keep coming. My editor

Adele Barlow

and I can’t wait for the book to be available to everyone in a couple of months time. A hard, but enviable task for us is choosing which couple of quotes go on the back cover!

If you need to read it right now and you can’t wait until it’s published, drop me a line and I’ll share an advance review copy with you.