Did CEOs Get a Free Pass During the Pandemic? Think Again

I recently was surprised by an attention-grabbing headline claiming, “the CEO free pass is over.” The article offered the hypothesis that CEOs have had a free ride during the global pandemic because their Boards were more lenient about traditional CEO performance metrics in light of the broader set of personnel, health, and socioeconomic challenges they have had to navigate.

I shared this recently with a board chair and CEO of a financial services company, and there was an audible guffaw. As someone who has advised CEOs and their boards for over a decade, I can tell you that there is no such thing as a free pass when you are guiding your company through a global pandemic.

More importantly, this article – which was clearly written to grab headlines while commenting on CEO turnover – viewed turnover data through narrow lens of executive recruiting rather than through the broader lens of leadership and performance. The global pandemic tested CEOs like no other world event, expanding the definition of performance to include dynamics and metrics that have historically taken a back seat: culture, employee health and wellness, DEI, talent risk, and of course, the very definition of “office” and work/life balance. CEOs have exhausted themselves for the last two and a half years trying to retain talent, keep them healthy, navigate remote and hybrid work, and set a vision for growth, while keeping everyone focused amidst war, economic uncertainty, and social unrest. How can anyone call that a free ride?

Putting aside the headline, the important truth is that the last few years have brought an important evolution in how Boards and CEOs view performance, and what matters to sustaining a company for long term growth. And this has implications for how Boards look for and hire their CEOs, and what they expect them to do in the role. Here are points to consider.

• The days of focusing solely on core performance metrics as a measure of CEO success are long gone, never to return
• The pandemic has shifted the measures of CEO performance and success to include expectations more broadly related to culture, talent, and resilience in the face of turmoil
• This has brought with it an expanded view of what CEOs – as leaders – need to focus on and drive through the organization, as part of their leadership of the company

3 Board lessons for CEO performance

So the question remains, given what we have learned, what should Boards be doing differently as they look at their current CEOs and how they stack up, or start planning for the next in line?

1. If it hasn’t happened already, update your company’s CEO performance expectations to expand beyond traditional performance KPIs such as financial, operational, customer satisfaction and sales. If employee metrics are missing, include engagement, turnover, investment into development, and succession readiness.
   
   
2. Update the CEO Success Profile for succession planning purposes. Start with the long-term strategy and build a profile that extends beyond experiences and track-record to include less tangible attributes such as the ability to build and sustain culture, retain key talent, lead through adversity and pivot in a changing environment. Don’t shy away from discussing “behaviors” as a critical success factor for the CEO. The marked difference between CEO success and failure during the pandemic and the racial reckoning following the George Floyd incident played out across companies and industries stemmed from CEO behaviors observed in real-time. Character matters!
   
   
3. Lastly, authorship is ownership. Include your CEO directly in the conversation about their own experiences since March of 2020, and how they view potential shifts in expectations of CEO performance as they reflect on lessons learned. True CEO success happens in partnership with a board that is invested in the success of the company as well as shareholder performance.