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UpdatesNov 20, 2017

The tricky issue of an underperforming CEO – and what to do about it

Have you ever had concerns about the performance of your CEO? Has your managing director behaved inappropriately and you weren’t sure how to handle it?

By Andrew Hobbs

HAVE you ever had concerns about the performance of your CEO? Has your managing director behaved inappropriately and you weren’t sure how to handle it?

If so, how on earth did you get the ball rolling with a performance improvement plan? Or approach that touchy subject with them?

Whether it is concerns about their performance or alleged misconduct, applying company management processes to the CEO can be challenging for any human resources (HR) manager.

Building a good relationship between the HR team and the board of directors or senior managers is key to ensuring that this can take place easily, and in making sure your CEO is doing their best work.

Generally, the CEO’s performance should be discussed at board or senior management level at each meeting – and the CEO should not be present when this takes place.

Senior managers should build a relationship with the HR management team, using them to help warn upper company management if they become aware of any concerns about the CEO.

Ultimately, this will mean that if any action is needed, it is taken with the support of the board or senior management.

Dealing with CEO performance issues

These performance assessments can be used to identify any gaps in the CEO’s performance and to find a way to provide assistance if needed.

This can be a supportive (as opposed to disciplinary) process, but should be the shared responsibility of the board and the HR team.

Take the following steps when counselling an underperforming employee:

Before embarking on any performance review, you should check the CEO’s contract for any special obligations you might have regarding performance reviews – and you should also review its termination of employment clauses so that you are aware of your options.

Seek legal advice before taking any disciplinary action or altering the CEO’s role to avoid a general protections claim or dispute.

Further to this, if there are serious conflicts of interest present – such as personal friendships with the CEO – you may wish to utilise a third-party consultant with human resource expertise to carry out a performance assessment.

7 key steps to handle employee complaints about your CEO

It is crucial that you have a clear process in place for dealing with any complaint made about the conduct of a CEO.

A complaints procedure ensures you can help your employees resolve issues quickly and minimises the need for external intervention.

The procedure should name someone, such as an HR manager, to whom any complaints can be made, and who will provide the complainant with guidance and support.

Ask these questions about your company complaints procedure:

The Employment Law Practical Handbook chapter covering employee grievances and disputes says explanations of the following points should be in every grievance procedure policy:

Building a separate process for raising concerns about the CEO can help make employees feel more comfortable about raising any complaints internally.

Even if an issue is raised informally (i.e. not by way of a written complaint), the organisation is still required to act.

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