When the scandal comes to light, a natural question is, “where was the board?” Most every board would agree the CEO’s personal conduct should be above reproach. But what should boards be doing to adequately support and provide healthy accountability in this regard? Frankly, there is wide disparity across organizations in terms of what levels of support and accountability are appropriate.

Why This Is Hard

Knowing what to do to help prevent CEO scandals is difficult for at least three reasons.

1. Most board members spend relatively little time with the organization – often just a handful of days per year. The time together can feel rushed, and board members do not always feel they have a sense for how things are going.

2. With the more sensitive aspects of interpersonal relationships and even finance, questions can feel uncomfortable and invasive, especially since the sharing is not reciprocal.

3. In Christian organizations, although many would agree the CEO’s personal spiritual health is foundational to avoiding scandals in the first place; boards are rightly reluctant to take the place of the CEO’s local church, small group, or accountability partner(s).

So, how can a board appropriately monitor the spiritual, interpersonal, and financial health and integrity of the CEO without going too far?

What to Do

The first and perhaps most important step is to have the discussion with the CEO.

The first and perhaps most important step is to have the discussion with the CEO.

Get past the awkwardness, point to the headlines, and raise the issue – if the CEO were in an unhealthy place and heading toward a fall, how would the board know? What can be put in place to help both the board and the CEO recognize and proactively address any concerning issues?

Decide about Guardrails. 

At least some areas of potential misconduct can be monitored with structural, policy-level guardrails. Decide about these. What kind of expense oversight should there be, and who should exercise that oversight? (Ideally, it should not be someone who reports to the CEO.)

Are there annual financial disclosures the CEO should submit to the board (e.g., outside business interests)? Does the board wish to implement bright-line policies around travel, accommodations, meetings, or significant time spent with colleagues or constituents of the opposite sex?

Decide How the Board Will Engage in These Conversations.

The board should also decide how else its monitoring and accountability will take place. Through the annual review process? If so, what questions are asked of whom? Are the annual reviews “360” such that members of the CEO’s executive team give feedback? What about other personal contacts (e.g., spouse, close confidant, etc.) selected in collaboration with the CEO? What can the board do to ensure feedback is confidential so it is open and honest?

Beyond the annual review, the board should consider what sort of ongoing, more informal conversations with the CEO are appropriate related to personal life and health. Who should have these conversations? With larger boards, it may be more appropriate and effective to have these conversations with a smaller subset, such as the chair, chair and vice chair, or small committee.

Decide How to Grow the Board/CEO’s Trust and Culture.

Finally, the board needs to decide in what ways it can work to maintain a healthy sense of safety and trust with the CEO. That sometimes means the board and CEO need to spend more intentional time together. This is admittedly a tall order, but it can be critically important: HR/finance policies and robust 360 reviews alone can be both too weak (they can be evaded) and too strong (they can make the CEO feel she/he is being unfairly scrutinized and judged). Instead, organizations should work to maintain deep trust between the board and CEO. That in turn allows the CEO, who knows the board comes from a posture of care and support, actually to invite the board to exercise its solemn duties in this space.

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Josh Heidelman is a partner at Castañeda + Heidelman LLP. He brings a breadth of experience to the table, having spent several years in private practice at AmLaw 100 law firms followed by more than five years in the role of General Counsel for a major global nonprofit. Josh serves as a board member for Christian Leadership Alliance.