The issue of trust in the matter of board searches is crucial. No CEO is going to bring anyone on board unless there is compelling information about that person’s track record, endorsements from other reputable people, or some personal “comfort level” or chemistry. At the same time, Bernie Madoff created a smoke and mirror world of perceived trust that crumbled very quickly once confronted by compelling facts.
What specifically are the trust pre-requisites? What do they mean by “trust?” Or are boards using this nebulous concept to hide other, less meaningful, judgments?
Must all prospects be known to the CEO or the board as personal friends? Should prospects only function in the same professional or social circles? Such criteria clearly would sacrifice the concept of independence.
How widely did the board or the CEO reach for endorsements or recommendations? If they only asked their close, personal friends (which often happens to keep the search process private), again, the search is overly narrow.
What is the board or CEO expecting the prospect to be “trust-worthy” about? Do they want assurances that he/she is not the type to blab confidences about executive compensation discussions? Or are they really looking for a candidate who will follow, in lock-step manner, every wish of the CEO and his/her chair or lead director?
Is the board expecting to be able to “trust” that a prospect will not hold divergent political views or different economic priorities? Doesn’t that sacrifice the benefits of independent intellectual perspectives?
Does the board want to be able to “trust” that the candidate will bring forth a broad perspective of expertise, ask quality questions, and collaboratively search for the best solutions for the benefit of the firm, its shareholders and stakeholders? The only way to get at that level of “trust” is to observe how an individual has performed throughout his/her career. Each board and CEO ultimately must broaden their definition of trust by explaining exactly what they expect the “trustee” to say or do?
By placing the trust bar as high as we do, typically without elaboration or explanation, we are essentially telling prospects, “Shoot for this goal. But, you’ll never know why we believe you missed it.”