Why conduct a CEO performance review?

A well-designed and facilitated CEO performance review is one of the absolute best investments an organisation can make.

In our experience, however, most CEOs are disappointed with their performance review for the following main reasons:

• many reviews are done irregularly or not done at all so the CEO receives little if any formal feedback
• some reviews consist simply of a comparison of some pre-agreed metrics with the hurdle rates set to determine the extent to which their CEO should receive a bonus
• there is rarely any quantitative measurement of their leadership, execution and personal attributes unless it is done by way of what is often a cumbersome 360-degree feedback process
• the perspectives of the CEO’s direct reports are rarely taken into account in a CEO performance review unless it is done by way of a formal 360 feedback process
• because the review is often done by the Chair and/or the Chair of the Nomination and Remuneration Committee, most directors do not provide any input into the review process and most don’t receive sufficient feedback once the process has been completed
• many reviews are not well documented and sometimes don’t include input from the CEO before being finalised on behalf of the board.

Even if many of the issues referred to above are dealt with well not enough reviews provide sufficient quantitative and qualitative feedback to add immense value to the CEO. We are acutely aware of such shortcomings, which is where the comprehensiveness of our surveys shine. Additionally, our Leadership Team Effectiveness Survey, Board Workshops and variety of reviews & surveys plug these gaps to promote compliance, productivity and workplace effectiveness.

Our CEO Effectiveness Framework

Insync has developed a CEO Effectiveness Framework designed around all the key attributes required for a CEO to be highly effective.

Our CEO Effectiveness Survey

Our online CEO Effectiveness Survey is completed by all directors and selected executives as well as the CEO. It is a high-value survey that takes respondents less than 25 minutes to complete. The survey is customisable which means survey items can be added, changed or deleted.

The resulting report sets a great baseline of perspectives concerning the CEO’s effectiveness and can be used to build a development program for the CEO. If the same survey has been used previously the report can also include comparison figures which show the areas in which the CEO’s effectiveness has changed. All director and executive responses are merged to protect the anonymity of respondents.

If a separate Forced CEO Attributes Ranking Survey has been used the CEO Effectiveness Report includes the gap between the perceived effectiveness of the CEO on each attribute compared to the importance of such attribute – with the importance calibrated using the Forced CEO Attributes Ranking Survey.

Forced Ranking Survey of CEO effectiveness attributes

Our research has identified 37 of the most important attributes for a CEO to be highly effective as shown in the framework above. But focusing on all 37 attributes is not likely to assist in the development of a CEO. Also, different attributes are more important at different stages of a CEO’s and an organisation’s development.

Unfortunately, most directors tend to rank all attributes as very important when asked to rate different CEO attributes which is why we developed a Forced Ranking Survey of the CEO Effectiveness Attributes. Our Forced Ranking Survey lists all the CEO Effectiveness Attributes on one webpage and directors are forced to rank each with either a 1 = most important, 2 = important or 3 = least important on the basis that they only use up to nine 1’s, nine 2’s and nine 3’s.

Once all directors have completed their rankings we provide them with a report showing the areas where directors are well aligned as well as areas where further discussion is recommended. For example, if half the directors rank an attribute as a 1 and the other half rank the attribute as a 2 or 3 a discussion will be important to reach alignment on which attributes are most important.

Achieving alignment is important when building a development plan for the CEO and when the board is articulating the attributes required in a successor to the CEO. The Forced Ranking Survey ensures that a constructive discussion is had and alignment is reached with this important topic.

An alternative approach – Structured interviews and an expert report

Because some boards & governance structures like to have an alternative approach, Insync has developed a bespoke approach for conducting a constructive development review for CEOs. This includes an interview with the CEO and a 45-minute structured interview with all directors and the CEO’s direct reports.

The interviews include a few minutes gathering a quantitative view of each participant concerning 8 to 10 of Insync’s CEO Effectiveness Attributes of a great CEO as well as perspectives of the CEO’s strengths and the biggest opportunities for the CEO to improve.

Once complete a detailed report including many unattributed comments made by interviewees is prepared for the Chair and the CEO. The report includes both a quantitative and a qualitative component.

Expert advice and coaching

Insync recommends that the process and timing that will be used to provide feedback to the CEO be agreed upon upfront and once agreed not changed to maintain the integrity of the process.

Insync can assist in providing feedback to the CEO, building a development plan and in any ongoing coaching that might be required.

What our clients say

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