Bad News “Bearers”

A reporter called me to ask this question: what should CEOs do when they have bad news to deliver to the board?  Let’s face it; these days- there is some bad news to deliver.  Still, I have a problem – not with the question – but the assumption.  The assumption being you’re going to walk into a board meeting and drop a bomb shell.

If you’re doing your job as CEO you’re in touch with your board.  Bad news should not come as an utter, complete, total surprise.  When times are tough (and for that matter when times are good) you need to have your board in the Feedback Loop.  If you aren’t getting on the phone or emailing key board members from time to time, then how on earth are you going to get the advice and information they are able to provide you?

Yes, business is done in the boardroom, and it is important.  But you need to build relationships with your board that extend beyond the formal meetings.  If you have a high quality board, you have people who can and should add value to your business.  If your board is doing its job, they should be acting as a valuable resource and sounding board for management.

Full disclosure: I have never run a public company.  But I’ve worked with a lot of CEOs who do.  Those who are successful figure out how their boards can help them make good decisions. 

If you have bad news, you should be picking up the phone and talking through the situation, at a strategic level, with the people who can provide advice, support, and good, sound counsel.  Your toughest critics can be (of course not always) your greatest ally if you cultivate their brains. 

Aside from building relationships what can you do when you have bad news? Take a step back and ask yourself, what will they ask?  Write down their questions, and then write down your answers in bullet point style.  Board members may disagree but they will give you the benefit of the doubt if you have thought through the issues and are well prepared.

 Print This Post