The role of a Chief Operating Officer may be clear for the CEO - but is it really understood by the Board of Directors? Well, they all think a COO has a different kind of role to play than the CEO. Well, what exactly is that difference?
Ideally, the COO should work closely with the CEO, and must be ready to wear the CEO hat if warranted. There have been instances where these two roles don’t get aligned well, leading to disruptions in the strategic execution. Is the COO really the No. 2 in the enterprise? Is it like the vice-president role in the US?
The Board of Directors must have a clear understanding of how the No. 2 executive plays the critical role. Unfortunately, there is no single job description available for a COO if you compare the same across organisations.
A COO can complement the chief with expertise in operations, finance, technology, or a particular division of the company. Some say the COO’s role is declining as organizations flatten, but global turmoil since 2020 has made operational expertise more vital.
What about the COO’s relationship with the board? How do directors shape the proper balance between their role, that of the CEO and the operations chief?
Shape corporate agenda
A CEO taps the COO’s experience and knowhow for board-effective operations. COOs wrote their board meeting agenda and ensured that the board prep package wasn’t a dissertation thesis. In between the CEO’s strategic goals for board meetings and the company secretary’s admin tasks, the COO can fill a crucial role in shaping the agenda to support priorities, assure information is board-usable and informative, and acting as a conduit for board feedback.
The COO is an important ‘make it happen’ player in talent planning and development. The board and chief executive should have a solid plan for succession and how to make it work – starting with all-around agreement on where the COO’s path is aiming.
The Sheryl Sandberg way
Most COOs do not want to be a CEO, as per recent research. For instance, Sheryl Sandberg whose skill as COO at Meta/Facebook made her more famous than most CEOs. A sound succession plan lets the board know whether to aid in grooming the COO for the top job, or to tap the role’s operational skills in other ways.
The COO can also support talent development by acting as an intermediary in exposing hi-pots to the board. He/she can bring VPs to board meetings to do presentations and groom their skills, and showcase the talent within the organization. This really can help raise their game.
That ‘O’ in the middle of the COO title has proven more crucial, as the global Covid trauma, and now war in central Europe, show just how easily functional issues can cripple businesses. The board should reach out to the COO on operational effectiveness. Lockdowns, supply chain disruptions, logistical nightmares, and most of all, talent shortages and churn have gone from being tactical headaches to life and death matters that every board must monitor.
Always in CEO's shadow
The COO needs to be briefing directors on the nuts and bolts of production, people, suppliers and customers. Wrestling with these demands is in their daily portfolio, and smart CEOs let them take the boardroom lead on them.
Finally, smart board members use discretion in balancing their growing need for COO communication with the role of their chief executive. We believe most board members would not go to the COO to work around the CEO.
One of the core jobs of the COO is to make the CEO look good. They need to deliver the whole picture to the board while not throwing the CEO under the bus. Effective CEOs don’t begrudge their COO a board role, and respect their value as a governance aid.
Effective boards tap this resource as a complement to the CEO role, and as someone who can help them to be better fiduciaries.
